General Motors has announced an increase in several financial forecasts for 2024 after exceeding Wall Street’s predictions for its second quarter performance.
The Detroit-based automaker revised its projected adjusted earnings to a range of $13 billion to $15 billion for the year, up from an earlier estimate of $12.5 billion to $14.5 billion. Additionally, GM raised its targets for operating cash flow and earnings per share. Meanwhile, the expectations for net income attributable to shareholders have been slightly adjusted downward to between $10 billion and $11.4 billion, a decrease of less than 1%.
The company reported second-quarter revenue of $47.9 billion, marking a more than 7% increase compared to the same period last year and surpassing the $45 billion that analysts had anticipated. Earnings per share were reported at $3.06, exceeding expectations of $2.71 per share and representing a 60% increase from 2023. Net income also rose by 14%, reaching $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading. The stock has appreciated over 37% this year. After the market closed on Monday, GM declared a cash dividend for the third quarter, further boosting investor confidence.
In her letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs and mentioned that GM is set to launch eight new or redesigned models across various size categories in North America. Barra emphasized the company’s commitment to disciplined growth in its electric vehicle (EV) line, particularly with the production of the Chevrolet Equinox.
However, Barra acknowledged earlier this month that GM is unlikely to 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 automaker plans to adapt by aligning production with demand, despite seeing growth in EV sales over the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving unit, would discontinue its Origin vehicle model, focusing instead on employing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM recorded a $600 million charge linked to the production halt of the Origin in Detroit.
Barra noted that using the Bolt would address regulatory concerns regarding the unique design of the Origin, helping to lower costs and optimize resources for the company.
“Our vision to transform mobility using autonomous technology remains unchanged, as every mile traveled and every simulation brings us closer to our goals, since Cruise operates as an AI-first company,” Barra stated.
GM is also working on restructuring its joint venture with SAIC Motor in China, which has been facing financial losses, reporting a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, a 50% drop compared to the previous year.