General Motors has updated its financial outlook for 2024 after exceeding Wall Street expectations for its second quarter. The Detroit-based automaker raised its forecast for adjusted earnings to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM 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 generated revenue of $47.9 billion, representing a more than 7% increase from the prior year and surpassing Wall Street’s expectations of $45 billion, according to FactSet. Earnings per share reached $3.06, exceeding the projected $2.71 and marking a 60% increase from 2023. Net income also rose by 14%, amounting to $2.9 billion compared to $2.5 billion in the same period last year.
Following the announcement, GM’s stock price surged almost 5% in pre-market trading and has increased over 37% so far this year. The company declared a cash dividend for the third quarter, contributing to the stock’s positive movement.
In a letter to shareholders, CEO Mary Barra praised the company’s success with gas-powered trucks and SUVs. She highlighted that GM is set to launch eight new or redesigned models across different segments in North America. Barra also provided updates on production for the electric Chevrolet Equinox, expressing excitement about their early success in electric vehicles while maintaining a focus on disciplined growth.
Earlier this month, Barra indicated that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a market slowdown. Despite this, GM plans to be flexible and adjust production to meet demand, with electric vehicle sales showing growth last quarter.
Additionally, Barra announced a strategic shift for Cruise, GM’s self-driving division, which will discontinue the Origin vehicle and instead focus on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a halt in Origin production, which resulted in a $600 million charge for GM.
During an analyst call, Barra stated that using the Bolt would address regulatory concerns regarding the Origin’s unique design, notably its lack of a steering wheel. This change is expected to reduce per-unit costs and enhance resource allocation.
Finally, GM is restructuring its joint venture with SAIC Motor in China due to ongoing losses. The company reported a loss of $104 million in the second quarter, with SAIC-GM cutting production by 70% and delivering 26,000 vehicles, which is a 50% decrease compared to the previous year.