General Motors has revised its financial forecasts for 2024 following a strong performance in the second quarter, surpassing Wall Street expectations. The automaker now anticipates adjusted earnings for the year to range between $13 billion and $15 billion, an increase 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 expectations for net income attributable to shareholders have been slightly reduced to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, a more than 7% increase year-over-year and surpassing the anticipated $45 billion, according to FactSet estimates. The company’s earnings per share reached $3.06, exceeding analysts’ expectation of $2.71, and showing a 60% increase from the previous year. Net income also saw a 14% rise, totaling $2.9 billion, up from $2.5 billion.
As a result, GM’s stock rallied nearly 5% in pre-market trading on Tuesday, marking a rise of over 37% since the beginning of the year. GM also declared a cash dividend for the third quarter, boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs and announced plans to launch eight new or redesigned models in North America. She emphasized GM’s commitment to increasing production of the electric Chevrolet Equinox, while also indicating a disciplined approach to scaling this growth.
Barra previously noted that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. Nevertheless, the company reported growth in EV sales during the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving unit, will abandon its Origin vehicle, a decision made after the unit had previously scaled back operations following an incident last October. Instead, Cruise will focus on the next-generation Chevrolet Bolt as they conduct tests in Texas and Arizona. GM incurred a $600 million charge due to the halt in Origin production in Detroit.
During an analyst call, Barra stated that the decision to use the Bolt would address regulatory concerns regarding the Origin’s unique design, which lacked a steering wheel. This shift is expected to lower costs per unit and improve resource allocation.
Barra reaffirmed GM’s vision to enhance mobility through autonomous technology, emphasizing that each mile traveled and simulation brings the company closer to its goals. GM is also working on restructuring its joint venture in China with SAIC Motor, as the company faces losses, including a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, which is half of what was delivered in the same period last year, according to Automotive News.