General Motors has raised its financial forecasts for 2024 after surpassing Wall Street’s expectations for the second quarter. The Detroit-based automaker now anticipates adjusted earnings between $13 billion and $15 billion for the year, an increase from its previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has adjusted its targets for operating cash flow and earnings per share, while lowering the net income expectation for shareholders slightly to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% rise compared to the prior year and exceeding the Wall Street estimate of $45 billion. Earnings per share were reported at $3.06, surpassing analysts’ expectations of $2.71 and showing a 60% increase from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion in the same quarter last year.
Following these results, GM’s stock climbed nearly 5% in pre-market trading, continuing a strong performance that has seen the stock price rise over 37% this year. After the market closed on Monday, GM declared a cash dividend for the third quarter, providing an additional boost to its stock.
In a letter to shareholders, CEO Mary Barra emphasized the company’s success with gas-powered trucks and SUVs while announcing plans to launch eight new or redesigned vehicle models across various categories in North America. Barra also highlighted GM’s ongoing production ramp-up of the electric Chevrolet Equinox, stressing the company’s commitment to disciplined growth in electric vehicle production even as it acknowledged a slowdown in the market. GM’s goal of producing 1 million electric vehicles in North America by the end of 2025 has been deemed unattainable due to these market conditions, but the company remains flexible in its approach to manufacturing based on demand.
Furthermore, Barra announced changes regarding Cruise, GM’s self-driving unit, which has previously scaled back operations after an incident last October. The company will discontinue its Origin vehicle in favor of utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge linked to the pause in Origin production.
During a call with analysts, Barra expressed confidence in Cruise’s vision to revolutionize mobility with autonomous technology, stating that every test and simulation is bringing the company closer to its goals.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China following ongoing losses, reporting a $104 million loss for the second quarter alone. Earlier in June, SAIC-GM significantly reduced production by 70%, resulting in the delivery of only 26,000 vehicles, a decrease of 50% compared to the previous year.