General Motors is adjusting its financial forecasts for 2024 after exceeding Wall Street’s expectations for its second quarter results.
The Detroit-based automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM raised its targets for operating cash flow and earnings per share, although it slightly lowered the expectation for net income attributable to shareholders by less than 1%, setting it at between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, which represents a more than 7% year-over-year increase and surpasses the Wall Street estimate of $45 billion, according to FactSet. Earnings per share reached $3.06, higher than the expected $2.71 and 60% greater than in 2023. The company’s net income rose by 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 and has seen a year-to-date increase of more than 37%. After the market closed on Monday, GM also declared a cash dividend for the third quarter, contributing to the stock’s positive performance.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and discussed plans to launch eight new or redesigned vehicle models across compact, mid-size, and full-size categories in North America. She expressed excitement about the scaling production of the electric Chevrolet Equinox and emphasized GM’s commitment to disciplined volume growth in the electric vehicle sector, despite acknowledging that the company would not meet its goal of one million electric vehicle productions in North America by the end of 2025 due to a market slowdown.
Barra also announced changes for Cruise, GM’s self-driving division, which has recently scaled back operations following an incident last October. The company will no longer pursue its Origin vehicle and will instead focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This shift comes after GM incurred a $600 million charge related to the halt of Origin production in Detroit. Barra stated that utilizing the Bolt could mitigate regulatory concerns associated with the Origin’s unique design and would also reduce costs per unit.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation brings us closer because Cruise is an AI-first company,” Barra noted.
Additionally, GM is looking to restructure its joint venture in China with SAIC Motor, as it continues to face losses, including a $104 million loss in the second quarter. Reports indicate that in June, SAIC-GM cut production by 70%, delivering only 26,000 vehicles, a 50% decline compared to the previous year.