General Motors has increased several financial projections for 2024 after exceeding Wall Street’s expectations for its second-quarter results.
The Detroit-based automaker has raised its forecast for adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, expectations for operating cash flow and earnings per share have also been elevated. However, the forecast for net income attributable to shareholders has seen a slight reduction of less than 1%, now projected between $10 billion and $11.4 billion.
During the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% increase compared to the prior year, and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share were recorded at $3.06, exceeding analysts’ forecasts of $2.71 and representing a 60% increase from 2023. Net income rose 14% to $2.9 billion, compared to $2.5 billion the previous year.
As a result of these strong performances, GM’s stock surged nearly 5% in pre-market trading on Tuesday, with an impressive 37% increase in value this year alone. Following market close on Monday, GM announced a cash dividend for the third quarter, further bolstering investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, mentioning that GM is in the process of launching eight new or redesigned models across various sizes in North America. Barra also emphasized that the production of the electric Chevrolet Equinox is ramping up, stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Earlier this month, Barra acknowledged that GM would not achieve its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company has indicated a flexible production approach, promising to “build to demand,” although EV sales did see growth in the last quarter.
Barra also announced a strategic shift for Cruise, GM’s self-driving division, which will abandon its Origin vehicle after having to scale back operations following an incident last October. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM recorded a $600 million charge associated with the halt in production of the Origin in Detroit.
During a recent call with analysts, Barra explained that transitioning to the Bolt would address regulatory concerns regarding the unique design of the Origin, such as the absence of a steering wheel. This pivot is also expected to reduce per unit costs and optimize GM’s resources.
“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 stated.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China, as the company continues to face losses, including a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70% and delivered 26,000 vehicles, which is 50% fewer than the previous year, according to Automotive News.