General Motors is increasing several financial forecasts for 2024 after exceeding Wall Street’s expectations in its second quarter results. The Detroit-based automaker raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM revised its targets for operating cash flow and earnings per share, while slightly lowering its 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 represents more than a 7% increase compared to the same period last year, surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share stood at $3.06, exceeding the analyst forecast of $2.71 per share and marking a 60% increase from 2023. The company’s net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result of these strong results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to a more than 37% increase in stock value this year. Following the market closure on Monday, GM also announced a cash dividend for the third quarter, which further boosted its stock value.
In a shareholder letter, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned the launch of eight new or redesigned models in various categories in North America. She confirmed that production of the electric Chevrolet Equinox is ramping up and maintained that while the company is enthusiastic about electric vehicles (EVs), it is committed to a disciplined approach to growth.
Earlier this month, Barra indicated that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company plans to be flexible and produce according to demand, although there was an increase in EV sales in the last quarter.
Barra also announced changes to GM’s self-driving unit, Cruise, which recently had to scale back operations following an incident last October. Cruise will no longer pursue the Origin vehicle and will instead focus on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM recorded a $600 million charge related to the suspension of the Origin’s production in Detroit.
During an analyst call, Barra emphasized that using the Bolt would resolve regulatory concerns over the Origin’s design, such as the absence of a steering wheel. This shift will also reduce costs per unit and improve resource optimization, she said.
GM is also restructuring its joint venture in China with SAIC Motor amid ongoing financial losses; the company suffered a $104 million loss in the second quarter. In June, SAIC-GM significantly cut its production by 70%, delivering only 26,000 vehicles, which is 50% less than the same period last year, according to Automotive News.