General Motors has updated its financial forecasts for 2024 following a strong performance in the second quarter that exceeded Wall Street expectations. The Detroit-based automaker has raised its adjusted earnings guidance for the year to a range of $13 billion to $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share, though expectations for net income attributable to shareholders have been slightly lowered to between $10 billion and $11.4 billion.
The company’s revenue for the second quarter reached $47.9 billion, reflecting a more than 7% increase year-over-year and surpassing the anticipated $45 billion, as reported by FactSet. Earnings per share stood at $3.06, exceeding analysts’ expectations of $2.71 and representing a 60% rise compared to 2023. Net income rose 14% to $2.9 billion, compared to $2.5 billion in the same period last year.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has experienced a more than 37% increase in 2023. Additionally, GM announced a cash dividend for the third quarter which contributed to the stock’s uplift.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, while also mentioning the launch of eight new or redesigned models in North America. Barra emphasized GM’s commitment to disciplined growth in electric vehicle (EV) production, particularly with the Chevrolet Equinox. However, she acknowledged that the company would not meet its target of producing 1 million EVs in North America by the end of 2025, attributing this to a slowdown in the market.
Moreover, Barra announced changes for the autonomous vehicle division, Cruise, which will discontinue the development of its Origin vehicle and instead focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision is expected to address regulatory concerns regarding the unique design of the Origin and will help reduce costs.
In a broader restructuring effort, GM is also looking to revamp its joint venture in China with SAIC Motor, as the company reported a $104 million loss in the second quarter. Production cuts by SAIC-GM led to a significant drop in vehicle deliveries, down 70% compared to the previous year, according to industry reports.