General Motors is raising its financial forecasts for 2024 after significantly exceeding Wall Street’s expectations in the second quarter.
The Detroit-based automaker 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. It also raised its goals for operating cash flow and earnings per share. However, the expectations for net income attributable to shareholders were slightly lowered, now projected to be between $10 billion and $11.4 billion, a decrease of less than 1%.
For the second quarter, GM reported revenue of $47.9 billion, a year-over-year increase of more than 7% and surpassing the Wall Street expectation of $45 billion, according to FactSet. Earnings per share reached $3.06, exceeding analyst forecasts of $2.71 and marking a 60% increase from 2023. Additionally, net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result, GM’s stock rose nearly 5% in pre-market trading on Tuesday, continuing a strong yearly performance that has seen shares climb over 37%. The company also announced a third-quarter cash dividend following Monday’s market close, further boosting its stock.
CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs in a letter to shareholders and mentioned the upcoming launch of eight new or redesigned models in North America. She emphasized the commitment to scaling production of the electric Chevrolet Equinox and underscored a disciplined approach to growth, stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Earlier this month, Barra noted that GM would not achieve its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. Despite this, the company’s EV sales did see growth in the last quarter.
In a significant shift, Barra announced that Cruise, GM’s self-driving unit, will discontinue its Origin vehicle and instead focus on testing next-generation Chevrolet Bolts in Texas and Arizona. This decision follows the suspension of operations after an incident in October. GM incurred a $600 million charge related to halting production of the Origin in Detroit.
Barra mentioned that using the Bolt will address regulatory concerns about the unique design of the Origin, which lacked a steering wheel, and will help lower costs while optimizing resources.
“Our vision to transform mobility using autonomous technology is unchanged,” Barra stated, emphasizing that every mile traveled and simulation brings Cruise closer to its goals as an AI-first company.
Additionally, GM is restructuring its joint venture in China with SAIC Motor, as it continues to face financial challenges. The company reported a $104 million loss for the second quarter, and in June, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, which is 50% fewer than the previous year.