General Motors has announced an increase in several financial projections for 2024 following a strong performance that exceeded Wall Street forecasts for the second quarter.
The automaker has raised 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, GM has revised its expectations for operating cash flow and earnings per share. Meanwhile, the forecast for net income attributable to shareholders has been slightly decreased by less than 1%, now expected to be between $10 billion and $11.4 billion.
In its second quarter, GM reported revenue of $47.9 billion, representing over a 7% increase from the previous year and surpassing Wall Street’s forecast of $45 billion, according to FactSet estimates. Earnings per share were reported at $3.06, exceeding the projected $2.71 and marking a 60% increase from 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
Shares of GM surged nearly 5% in pre-market trading on Tuesday and have risen more than 37% this year. The company also announced a third-quarter cash dividend after market close on Monday, contributing to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, emphasizing the company’s plans to launch eight new or redesigned models across various sizes in North America. She also mentioned the scaling of production for the electric Chevrolet Equinox, assuring shareholders of the company’s commitment to disciplined growth in electric vehicle (EV) production.
Earlier this month, Barra noted that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. However, the company stated that it would be flexible and “build to demand,” while also reporting increased EV sales in the last quarter.
Additionally, Barra indicated that Cruise, GM’s self-driving division, would discontinue its Origin vehicle after previously scaling back operations following an incident last October. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision led GM to incur a $600 million charge related to the suspension of Origin production in Detroit.
During a call with analysts, Barra noted that using the Bolt would address regulatory concerns regarding the Origin’s distinct lack of a steering wheel. She added that this shift would reduce unit costs and allow GM to better manage its resources.
“Our vision to transform mobility using autonomous technology remains steadfast,” Barra stated, emphasizing that each mile driven and simulation conducted brings Cruise closer to its goals as an AI-focused company.
Furthermore, GM is working to restructure its joint venture with SAIC Motor in China, continuing to face losses. The company reported a $104 million loss for the second quarter, with SAIC-GM having reduced production by 70% in June, delivering only 26,000 vehicles, a 50% decrease compared to the previous year.