General Motors has announced an increase in several financial projections for 2024 following impressive performance in its second quarter that exceeded Wall Street expectations.
The automaker has raised its adjusted earnings forecast for the year to between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, targets for operating cash flow and earnings per share have also been elevated. However, the expectation for net income attributed to shareholders has been moderated slightly, reduced by less than 1% to a range of $10 billion to $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking an increase of over 7% compared to last year, outpacing Wall Street’s expectation of $45 billion based on FactSet estimates. Earnings per share stood at $3.06, surpassing the $2.71 forecast by analysts and representing a 60% increase compared to 2023. Net income grew by 14% to $2.9 billion, compared to $2.5 billion a year earlier.
Following these announcements, GM shares rose nearly 5% in pre-market trading on Tuesday and have appreciated more than 37% throughout the year. GM also declared a cash dividend for the third quarter, contributing to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, and announced the launch of eight new or redesigned compact, mid-size, and full-size models in North America. She also mentioned the ramp-up in production of the electric Chevrolet Equinox, affirming the company’s commitment to sustainable yet measured growth in the electric vehicle sector.
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, attributing this shortfall to a slowdown in the market. She emphasized that the company would adapt to demand while noting that electric vehicle sales experienced growth in the last quarter.
Barra also revealed that Cruise, GM’s self-driving unit, would discontinue its Origin vehicle after operational setbacks, opting to utilize a next-generation Chevrolet Bolt for testing in Texas and Arizona. This shift is expected to address regulatory concerns related to Origin’s unconventional design, such as the absence of a steering wheel and to help reduce costs.
“Our vision to transform mobility using autonomous technology is unchanged, and with every mile traveled and every simulation, we’re getting closer because Cruise is an AI-first company,” Barra stated.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China as it reports ongoing losses, including a $104 million deficit in the second quarter. Production cuts by SAIC-GM in June led to a 70% reduction and a delivery of 26,000 vehicles, a decrease of 50% compared to the same period last year.