General Motors has revised its financial forecasts for 2024 following a strong performance in its second quarter that exceeded Wall Street’s expectations.
The company 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, it has raised targets for operating cash flow and earnings per share. However, the expectations for net income attributable to shareholders were slightly lowered to a range of $10 billion to $11.4 billion, representing less than a 1% decrease.
In the second quarter, GM reported revenue of $47.9 billion, marking an over 7% increase year-over-year and surpassing Wall Street’s $45 billion expectations. Earnings per share reached $3.06, exceeding the $2.71 analysts had predicted and reflecting a 60% increase from 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to a more than 37% increase in the stock price this year. The company also declared a third-quarter cash dividend after the market closed on Monday, which further buoyed investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She also mentioned that the company is set to launch eight new or redesigned vehicle models in North America. Barra emphasized the ramping up of production for the electric Chevrolet Equinox, stating that the company is eager about its EVs but committed to disciplined growth.
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 has stated it will adapt its production strategy to meet demand, even as EV sales saw an uptick in the last quarter.
In an additional update, Barra announced that Cruise, GM’s autonomous driving division that previously scaled back operations after an incident last October, would discontinue its Origin vehicle. Instead, Cruise will pivot to using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a $600 million charge related to halting Origin production.
During a conference call, Barra expressed that utilizing the Bolt would alleviate regulatory concerns regarding the Origin’s unique design, like its absence of a steering wheel. This shift is expected to reduce costs per unit and enhance resource optimization.
Barra reaffirmed that GM’s commitment to transforming mobility through autonomous technology remains steadfast, highlighting that each mile and simulation brings the company closer to its goals as Cruise operates with an AI-first approach.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China, where it has been experiencing losses, reporting a $104 million loss in the second quarter. Production was cut by 70% in June, with the joint venture delivering only 26,000 vehicles, a 50% decline compared to the previous year.