General Motors has increased its financial forecasts for 2024 following a strong second-quarter performance that exceeded Wall Street’s expectations.
The Detroit-based automaker now anticipates its adjusted earnings for the year will range between $13 billion and $15 billion, a rise from the previous estimate of $12.5 billion to $14.5 billion. Additionally, it has raised its targets for operating cash flow and earnings per share, 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 over a 7% increase from the same period last year and exceeding Wall Street’s forecast of $45 billion, according to FactSet estimates. The company’s earnings per share reached $3.06, surpassing the $2.71 predicted by analysts and reflecting a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion in the previous year.
As a result of these strong earnings, GM’s stock increased nearly 5% in pre-market trading, contributing to a year-to-date rise of more than 37%. Following the market closure on Monday, GM announced a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and outlined plans to launch eight new or redesigned models in North America. She also emphasized the company’s commitment to scaling production of the electric Chevrolet Equinox, affirming that GM is dedicated to disciplined growth in electric vehicle (EV) production. However, she also acknowledged that GM would not meet its target of producing 1 million EVs in North America by the end of 2025 due to a slowdown in the market.
Furthermore, Barra announced that GM’s autonomous driving unit, Cruise, will discontinue its Origin vehicle and instead use the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the halt of the Origin’s production in Detroit. She indicated that this shift would address regulatory concerns about the Origin’s unique design and ultimately reduce costs and improve resource allocation.
“Our vision to transform mobility using autonomous technology remains steadfast, and every mile traveled and each simulation brings us closer because Cruise is fundamentally an AI-focused company,” Barra stated.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China, following reported losses, including a $104 million loss in the second quarter. Production cuts by SAIC-GM resulted in a 70% reduction, with only 26,000 vehicles delivered, or half the amount delivered the previous year, as reported by Automotive News.