General Motors has revised its financial forecasts for 2024, exceeding Wall Street expectations in its second quarter results.
The automaker from Detroit has increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its operating cash flow and earnings per share targets, although it slightly reduced 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, marking an increase of over 7% from the previous year and surpassing the $45 billion anticipated by Wall Street analysts. Earnings per share also exceeded expectations at $3.06, compared to the $2.71 forecasted, representing a 60% increase from 2023. Net income saw a 14% rise to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to a more than 37% increase in stock price this year. The company also announced a third-quarter cash dividend after trading closed on Monday, which positively impacted its stock.
In her letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs. She noted that the company is set to launch eight new or redesigned models across various categories in North America. Barra mentioned that GM is ramping up production of the electric Chevrolet Equinox and emphasized the company’s commitment to disciplined growth in the electric vehicle sector.
Earlier this month, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The company plans to be flexible and “build to demand” while also reporting an increase in EV sales last quarter.
Barra also revealed that Cruise, GM’s self-driving division, would abandon its plans for the Origin vehicle, which faced operational setbacks after an incident last year. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the halt in Origin production.
During a discussion with analysts, Barra stated that using the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacks a steering wheel. This strategic change is expected to reduce costs per unit and optimize resources.
“Our vision to transform mobility with autonomous technology remains unchanged, as every mile traveled and every simulation brings us closer to our goals because Cruise is an AI-first company,” said Barra.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China, as it continues to incur losses, including a $104 million loss in the second quarter. In June, production at SAIC-GM was slashed by 70%, resulting in the delivery of only 26,000 vehicles, which is a 50% decrease from the previous year.