General Motors has raised its financial forecasts for 2024 following strong performance in the second quarter that exceeded Wall Street estimates. The auto giant now anticipates adjusted earnings for the year to be between $13 billion and $15 billion, an increase from its previous prediction of $12.5 billion to $14.5 billion. Furthermore, targets for operating cash flow and earnings per share have also been elevated. Net income expectations attributable to shareholders have been revised downward slightly to a range of $10 billion to $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the previous year and surpassing the Wall Street expectation of $45 billion as per FactSet estimates. The company’s earnings per share reached $3.06, which was higher than the analysts’ prediction of $2.71 and represents a 60% increase compared to 2023. Net income also rose by 14% to $2.9 billion, up from $2.5 billion.
As a result of these positive outcomes, GM shares surged almost 5% in pre-market trading on Tuesday, contributing to an overall increase of more than 37% in stock value this year. Following trading hours on Monday, GM announced a third-quarter cash dividend, further boosting investor sentiment.
In a letter to shareholders, CEO Mary Barra highlighted the strong demand for gasoline-powered trucks and SUVs. She mentioned that GM is set to launch eight new or redesigned models across various sizes in North America. Additionally, Barra stated that the company is ramping up production of the electric Chevrolet Equinox, emphasizing a commitment to disciplined growth in electric vehicles (EVs), even as the company acknowledged that it would fall short of its target of producing 1 million EVs in North America by the end of 2025 due to market slowdowns.
Moreover, Barra announced that Cruise, GM’s self-driving unit, would abandon the development of its Origin vehicle following operational setbacks last October. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for vehicle testing in Texas and Arizona. This strategic shift comes with a $600 million write-off associated with the halted production of the Origin.
During a call with analysts, Barra expressed that using the Bolt would mitigate regulatory concerns regarding the unique design of the Origin and would also be more cost-effective in terms of resource allocation. She reaffirmed GM’s commitment to revolutionizing mobility through autonomous technology, stating that each advancement in simulation and data collection brings the company closer to its vision.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China, as losses continue to accumulate; the company reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is 50% less than the same period last year, according to industry reports.