General Motors has significantly raised its financial forecasts for 2024 after exceeding Wall Street’s expectations in its second quarter results.
The Detroit-based automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM revised its targets for operating cash flow and earnings per share. However, it slightly lowered its expectations for net income attributable to shareholders by less than 1%, now anticipated to be between $10 billion and $11.4 billion.
In the second quarter, revenue hit $47.9 billion, reflecting a more than 7% increase from the previous year and surpassing the $45 billion forecasted by Wall Street analysts, according to FactSet estimates. Earnings per share reached $3.06, exceeding the expected $2.71 and representing a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result of these optimistic figures, GM’s stock rose nearly 5% in pre-market trading on Tuesday, marking a year-to-date increase of over 37%. The company also declared a third-quarter cash dividend shortly after the market closed on Monday, which contributed to the positive momentum in its stock.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs, announcing plans to launch eight new or redesigned vehicle models in North America. She emphasized the scaling up of production for the electric Chevrolet Equinox, reaffirming the company’s commitment to disciplined growth in electric vehicle production, despite earlier comments about missing its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns.
Barra also disclosed that Cruise, GM’s autonomous vehicle division that had previously scaled back operations following an incident last October, would no longer pursue its Origin vehicle project. Instead, Cruise will focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. The shift led GM to incur a $600 million charge related to the halted production of the Origin in Detroit.
During an analyst call, Barra assured that transitioning to the Bolt would alleviate regulatory concerns regarding the Origin’s unique design, such as the absence of a steering wheel. This change is expected to reduce per unit costs and optimize GM’s resources.
“Our vision to transform mobility using autonomous technology remains intact, and with every mile traveled and each simulation conducted, we move closer to our goals, as Cruise operates as an AI-first company,” Barra stated.
Additionally, GM is seeking to reorganize its joint venture with SAIC Motor in China due to ongoing losses; the company reported a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, which is a 50% decrease from the previous year, according to Automotive News.