General Motors has increased its financial forecasts for 2024 after significantly exceeding Wall Street expectations for its second-quarter results.
The automaker, based in Detroit, has raised its anticipated adjusted earnings for the year to between $13 billion and $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, it has adjusted its targets for operating cash flow and earnings per share, while reducing expectations for net income attributable to shareholders by less than 1%, now projecting between $10 billion and $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, marking a more than 7% increase from the prior year and surpassing the $45 billion forecast by Wall Street according to FactSet estimates. The company’s earnings per share reached $3.06, exceeding the anticipated $2.71 and representing a 60% rise compared to 2023. Net income rose by 14% to $2.9 billion, compared to $2.5 billion from the previous year.
Following the announcement, GM’s stock experienced a nearly 5% surge in pre-market trading on Tuesday and has risen over 37% throughout the year. The company declared a cash dividend for the third quarter after the market closed on Monday, contributing to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs, and mentioned that the company is set to launch eight new or redesigned vehicle models in North America. She also addressed the scaling production of the electric Chevrolet Equinox, stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Earlier this month, Barra acknowledged 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 has pledged to remain flexible and “build to demand,” even as EV sales showed growth during the last quarter.
Furthermore, Barra announced that Cruise, GM’s self-driving unit, will no longer produce its Origin vehicle after operations were halted due to an incident last October. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million expense associated with the discontinuation of the Origin’s production in Detroit.
During a discussion with analysts, Barra noted that the decision to use the Bolt would address any regulatory concerns regarding the Origin’s unconventional design, including its lack of a steering wheel. This adjustment is expected to reduce per unit costs and help optimize GM’s 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 emphasized.
GM is also working to restructure its joint venture in China with SAIC Motor amid ongoing 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, which is 50% fewer than the previous year, as reported by Automotive News.