General Motors is increasing its financial forecasts for 2024 after exceeding Wall Street’s expectations during the second quarter. The automaker has raised its predicted adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous range of $12.5 billion to $14.5 billion. Additionally, it adjusted its targets for operating cash flow and earnings per share while lowering its expectations for net income attributable to shareholders by less than 1%, now projecting between $10 billion and $11.4 billion.
In terms of revenue, GM reported $47.9 billion for the second quarter, a more than 7% rise compared to last year and surpassing Wall Street’s expectation of $45 billion, as per FactSet estimates. The company’s earnings per share were $3.06, exceeding the anticipated $2.71 and representing a 60% increase from 2023. Net income increased by 14%, reaching $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 it has risen more than 37% so far this year. Additionally, the company announced a third-quarter cash dividend after trading closed on Monday, providing further support to its stock.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, revealing that the company plans to introduce eight new or redesigned compact, mid-size, and full-size models in North America. She also discussed the ramp-up of production for the electric Chevrolet Equinox, emphasizing that while GM is excited about its electric vehicles (EVs) and early achievements, it remains focused on disciplined growth in production.
Barra also noted earlier this month that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company intends to be adaptable and “build to demand,” despite witnessing growth in its EV sales last quarter.
The CEO announced that Cruise, GM’s self-driving division, would be discontinuing its Origin vehicle following a setback in operations last October. Instead, Cruise will prioritize testing using the next-generation Chevrolet Bolt in Texas and Arizona. GM recorded a $600 million charge related to stopping production of the Origin in Detroit.
During a call with analysts, Barra stated that utilizing the Bolt would alleviate regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. This strategy will also help reduce costs per unit and optimize resources.
“Our vision to transform mobility using autonomous technology remains intact, and every mile traveled, and every simulation brings us closer because Cruise is an AI-first company,” Barra said in her remarks.
Lastly, GM is also working on restructuring its joint venture with SAIC Motor in China due to ongoing losses, reporting a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is 50% less than the previous year, according to Automotive News.