General Motors has raised several financial forecasts for 2024 following a strong performance that exceeded Wall Street’s expectations in its second quarter results.
The Detroit-based automaker has adjusted its anticipated adjusted earnings for the year to range between $13 billion and $15 billion, an increase from the previous range of $12.5 billion to $14.5 billion. GM also updated its targets for operating cash flow and earnings per share, although it slightly lowered expectations for net income attributable to shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
In the second quarter, GM’s revenue reached $47.9 billion, reflecting a more than 7% increase from the same period last year and surpassing the $45 billion projected by analysts, according to FactSet. The earnings per share stood at $3.06, exceeding the analysts’ expected $2.71 per share, and marking a 60% increase compared to the previous year. Net income rose 14% to $2.9 billion, up from $2.5 billion.
GM’s stock rose nearly 5% in pre-market trading on Tuesday, with an overall increase of over 37% this year. Following the market close on Monday, GM announced a cash dividend for the third quarter, contributing to the stock’s upward momentum.
In a letter to shareholders, GM CEO Mary Barra highlighted the success of its gas-powered trucks and SUVs, stating that the company is introducing eight new or redesigned models in North America. She also indicated that GM is ramping up production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in electric vehicle (EV) production, despite earlier comments that GM would not meet its goal of producing 1 million EVs in North America by the end of 2025 due to market slowdowns.
Additionally, Barra announced that Cruise, GM’s self-driving division that had to suspend operations after an incident last October, will move away from its Origin vehicle design. Instead, Cruise will focus on testing the next-generation Chevrolet Bolt in Texas and Arizona. GM incurred a $600 million charge linked to halting production of the Origin in Detroit.
During a call with analysts, Barra noted that using the Bolt would address regulatory concerns arising from the Origin’s unique design, such as its absence of a steering wheel. This shift will also reduce costs per unit and allow GM to optimize its resources.
“Our vision to transform mobility using autonomous technology remains unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” Barra stated.
Finally, GM is looking to restructure its joint venture in China with SAIC Motor, as it continues to experience financial losses. The company reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, resulting in the delivery of 26,000 vehicles, a 50% decline compared to the previous year.