General Motors has raised several financial forecasts for 2024 after exceeding Wall Street’s predictions for its second quarter results.
The Detroit automaker has adjusted its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, although it has slightly lowered 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, representing an increase of over 7% compared to the same period last year, and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. The company’s earnings per share reached $3.06, exceeding analysts’ predictions of $2.71 and marking a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
The positive financial news led to a nearly 5% increase in GM’s stock during pre-market trading on Tuesday, contributing to a year-to-date increase of over 37% for the stock. GM also announced a third-quarter cash dividend after trading closed on Monday.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned that the company is launching eight new or redesigned models across different size categories in North America. Barra stated that GM is ramping up production of the electric Chevrolet Equinox and emphasized the company’s commitment to sustainable volume growth despite previous forecasts of producing 1 million electric vehicles in North America by the end of 2025 being adjusted due to market conditions.
Additionally, Barra announced that Cruise, GM’s self-driving division which had previously scaled back operations due to an incident last October, would discontinue its Origin vehicle and concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. The decision resulted in a $600 million charge linked to the halted production of the Origin in Detroit.
During a call with analysts, Barra addressed potential regulatory concerns regarding the unique design of the Origin, noting that transitioning to the Bolt would mitigate those issues and reduce per-unit costs while allowing GM to optimize its resources.
Barra reiterated that GM’s vision of transforming mobility through autonomous technology remains steadfast, stating that both practical trials and simulations are progressively advancing Cruise as an AI-first company.
Furthermore, GM is seeking to restructure its joint venture in China with SAIC Motor, as the company continues to experience losses, reporting a $104 million deficit for the second quarter. Production was slashed by 70% in June, resulting in only 26,000 vehicle deliveries, which is a 50% decrease compared to the previous year.