General Motors has updated its financial forecasts for 2024 following a robust performance in the second quarter that exceeded analyst expectations.
The company has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. GM also raised its targets for operating cash flow and earnings per share, while slightly reducing its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In terms of revenue, GM reported $47.9 billion for the second quarter, marking a more than 7% increase from the previous year and surpassing Wall Street’s forecast of $45 billion, according to FactSet. The company posted earnings per share of $3.06, exceeding the expected $2.71 and reflecting a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock surged nearly 5% in pre-market trading and has risen over 37% this year. Additionally, GM declared a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs, and detailed the launch of eight new or redesigned models across various sizes in North America. She also mentioned that GM is ramping up production of the electric Chevrolet Equinox, asserting the company’s commitment to disciplined growth in electric vehicle (EV) production.
However, earlier this month, Barra acknowledged that GM would not meet its target of producing 1 million EVs in North America by the end of 2025, attributing the delay to a slowing market. Despite this, the company is adapting its approach to produce according to demand, and EV sales did show growth in the last quarter.
In another key announcement, Barra indicated that Cruise, GM’s self-driving division, would abandon its plans for the Origin vehicle and instead utilize the next-generation Chevrolet Bolt during testing phases in Texas and Arizona. This decision follows a halt in production for the Origin after a setback last October. GM incurred a $600 million charge due to this stoppage.
During a call with analysts, Barra explained that using the Bolt would address regulatory concerns regarding the unique design of the Origin, such as its lack of a steering wheel. This shift is expected to reduce costs per unit and allow GM to allocate resources more effectively.
“Our vision to transform mobility through autonomous technology remains steadfast, and every mile traveled and simulation conducted will bring us closer to our goals because Cruise operates as an AI-first company,” Barra stated.
Additionally, GM is working on restructuring its joint venture with SAIC Motor in China as the company grapples with ongoing losses, reporting a $104 million loss in the second quarter alone. In June, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, which is half of what was reported a year ago, according to Automotive News.