General Motors has revised its financial forecasts for 2024 following strong performance in the second quarter, exceeding Wall Street expectations. The 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. Additionally, it adjusted its targets for operating cash flow and earnings per share, while slightly reducing its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In terms of revenue, GM reported $47.9 billion for the second quarter, marking over a 7% increase from the same period last year and surpassing Wall Street’s prediction of $45 billion. The company achieved earnings per share of $3.06, exceeding the anticipated $2.71 and reflecting a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result of these positive developments, GM’s stock price surged nearly 5% in pre-market trading on Tuesday and has increased by more than 37% this year. The company also declared a third-quarter cash dividend, contributing to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, and shared details about the introduction of eight new or redesigned models in North America. She affirmed the company’s commitment to disciplined growth in electric vehicle (EV) production, specifically mentioning the upcoming electric Chevrolet Equinox.
However, Barra acknowledged a setback regarding GM’s target to produce 1 million EVs in North America by the end of 2025, citing a slowdown in the market and emphasizing a flexible approach to production based on demand. Despite this, EV sales have increased in the last quarter.
In a significant operational update, Barra announced that GM’s self-driving unit, Cruise, will discontinue its Origin vehicle model, shifting focus to the next-generation Chevrolet Bolt for vehicle testing in Texas and Arizona. The decision followed a $600 million charge related to the halted production of the Origin, which faced regulatory concerns due to its unconventional design lacking a steering wheel. This change is intended to reduce costs and optimize resources.
Barra reiterated GM’s unwavering commitment to transforming mobility through autonomous technology, stating that each mile and simulation advances their goals. Additionally, GM is working on restructuring its joint venture in China with SAIC Motor, which has been incurring losses; the company reported a $104 million loss for the second quarter this year, with production slashed by 70% and vehicle deliveries down by 50% compared to the prior year.