General Motors has updated its financial forecasts for 2024 following a strong performance that exceeded Wall Street expectations in the second quarter. The Detroit-based automaker has raised its projected adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share, while slightly lowering the 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, marking a more than 7% increase from the previous year and surpassing Wall Street’s anticipated $45 billion, according to FactSet estimates. The earnings per share stood at $3.06, exceeding the $2.71 forecast by analysts and representing a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock increased nearly 5% in pre-market trading and has gained more than 37% in value this year. The company also declared a third-quarter cash dividend after trading closed on Monday, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of GM’s gasoline-powered trucks and SUVs. She mentioned that the company is preparing to launch eight new or redesigned models across different categories in North America. Barra expressed excitement about the scaling production of the electric Chevrolet Equinox while emphasizing a commitment to disciplined growth in this segment.
Despite earlier aspirations, Barra noted that GM will 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 is adopting a more flexible approach to production, aiming to “build to demand,” although its electric vehicle sales did see growth in the last quarter.
Barra also revealed that Cruise, GM’s self-driving division, will abandon plans for its Origin vehicle after experiencing setbacks related to its production. Instead, the unit will focus on integrating the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the pause in Origin production in Detroit.
During discussions with analysts, Barra stated that using the Bolt will address regulatory concerns regarding the unique design of the Origin, such as its lack of a steering wheel. This shift is also intended to reduce production costs and optimize resources for GM.
The automaker is also working to restructure its joint venture with SAIC Motor in China, where it continues to face losses. GM reported a $104 million loss related to this venture for the second quarter. In June, SAIC-GM reduced its production by 70%, delivering 26,000 vehicles, which is a 50% decline compared to the previous year.