General Motors has upgraded its financial forecasts for 2024, exceeding Wall Street’s expectations in the second quarter.
The Detroit-based automaker raised its projected 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 increased its targets for operating cash flow and earnings per share, while slightly lowering 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, an increase of over 7% compared to the same period last year, and surpassing Wall Street’s forecast of $45 billion. Earnings per share reached $3.06, which is higher than the anticipated $2.71 and represents a 60% increase from 2023. The net income for the quarter rose 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock surged nearly 5% in pre-market trading, and it has seen an overall increase of more than 37% this year. GM also announced a cash dividend for the third quarter, contributing to the stock’s positive performance.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of GM’s gas-powered trucks and SUVs and mentioned the launch of eight new or redesigned vehicle models across various segments in North America. She emphasized the company’s commitment to scaling production of the electric Chevrolet Equinox, stating that while they are excited about their electric vehicles (EVs) and early successes, they aim for 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. Despite this, EV sales did see growth last quarter, and the company plans to remain adaptable by “building to demand.”
Barra also announced that Cruise, GM’s self-driving division, would discontinue its Origin vehicle model after facing operational challenges. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt during testing in Texas and Arizona. GM recorded a $600 million charge related to ceasing production of the Origin model in Detroit.
In discussions with analysts, Barra mentioned that adopting the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as the absence of a steering wheel. This shift is intended to reduce costs per unit and optimize resources.
“Our vision to transform mobility using autonomous technology remains firm, as every mile traveled and every simulation brings us closer to our goal, with Cruise positioned as an AI-first company,” Barra stated.
Additionally, GM is reassessing its joint venture with SAIC Motor in China as it grapples with losses, having reported a $104 million loss in the second quarter. In June, SAIC-GM drastically reduced production by 70%, delivering 26,000 vehicles, which is 50% fewer than the previous year.