General Motors has increased its financial forecasts for 2024 after exceeding Wall Street predictions for its second-quarter performance. The Detroit automaker now expects adjusted earnings for the year to range between $13 billion and $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share, while slightly decreasing expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, which marks an increase of more than 7% compared to the previous year, surpassing the $45 billion anticipated by Wall Street analysts, as per FactSet estimates. The company’s earnings per share reached $3.06, exceeding the expected $2.71, and were 60% higher than the same period in 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock saw a nearly 5% increase in pre-market trading on Tuesday, reflecting an overall gain of more than 37% this year. On Monday, GM also declared a cash dividend for the third quarter, which contributed to the stock’s rise.
In a letter to shareholders, CEO Mary Barra celebrated the success of GM’s gas-powered trucks and SUVs, revealing plans to launch eight new or redesigned models in North America. She highlighted the scaling production of the electric Chevrolet Equinox and expressed commitment to disciplined volume growth despite an earlier statement indicating GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown.
Barra also shared that Cruise, GM’s self-driving subsidiary that faced operational setbacks after an incident last October, will discontinue its Origin vehicle in favor of using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes after GM incurred a $600 million charge due to the suspension of Origin’s production in Detroit.
During a call with analysts, Barra stated that utilizing the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacks a steering wheel. She noted that the shift would also reduce per unit costs and help GM optimize its resources.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation brings us closer because Cruise is an AI-first company,” Barra affirmed.
Additionally, GM is working on restructuring its joint venture in China with SAIC Motor, as the company continues to experience losses, reporting a $104 million loss for the second quarter. In June, production was cut by 70% at SAIC-GM, resulting in the delivery of 26,000 vehicles, which is 50% lower than the previous year.