General Motors has revised its financial forecasts for 2024 following a strong performance in its second quarter, exceeding Wall Street’s expectations.
The automaker raised its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from the prior estimate of $12.5 billion to $14.5 billion. Additionally, GM increased its targets for operating cash flow and earnings per share. However, the expectations for net income attributable to shareholders were slightly reduced by less than 1%, now anticipated to be between $10 billion and $11.4 billion.
For the second quarter, GM’s revenue reached $47.9 billion, reflecting a more than 7% increase compared to the same period last year and surpassing the $45 billion expectation set by analysts. Earnings per share stood at $3.06, exceeding the anticipated $2.71, and representing a 60% increase from 2023. Net income grew by 14%, amounting to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading on Tuesday, having increased more than 37% since the beginning of the year. The company also declared a cash dividend for the third quarter, contributing to the stock’s upward momentum.
In her letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs. She mentioned that the company is set to launch eight new or redesigned models across various sizes in North America. Additionally, Barra noted the ramp-up in production of the electric Chevrolet Equinox, emphasizing GM’s commitment to disciplined volume growth while expressing excitement about early successes in its electric vehicle (EV) lineup.
Earlier this month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowing market. The company plans to remain flexible and align production with demand, although its EV sales did see growth in the previous quarter.
Barra also announced a strategic shift for Cruise, GM’s self-driving division, which had to reduce operations after an incident last October. Cruise will discontinue its plans for the Origin vehicle and instead utilize the next-generation Chevrolet Bolt to test self-driving capabilities in Texas and Arizona. This shift comes with a $600 million charge related to the halted production of the Origin.
During a discussion with analysts, Barra stated that utilizing the Bolt would alleviate regulatory concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. She added that this change would also reduce costs and optimize 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.
GM is also working on restructuring its joint venture in China with SAIC Motor, where it has been struggling with losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, which is 50% less than the previous year, according to Automotive News.