General Motors has increased its financial projections for 2024 following impressive second-quarter results that exceeded Wall Street estimates. The Detroit-based automaker has revised its adjusted earnings forecast to a range of $13 billion to $15 billion, up from $12.5 billion to $14.5 billion, and has also adjusted its targets for operating cash flow and earnings per share. However, expectations for net income attributable to shareholders have been slightly reduced by less than 1%, now estimated between $10 billion and $11.4 billion.
In the second quarter, GM reported revenues totaling $47.9 billion, marking a more than 7% rise from the previous year and surpassing the anticipated $45 billion forecast by analysts, according to FactSet estimates. Earnings per share reached $3.06, exceeding the expected $2.71 and representing a 60% increase from 2023. Net income climbed 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock price jumped nearly 5% in pre-market trading on Tuesday and has risen over 37% this year. Additionally, the company declared a third-quarter cash dividend just after the market closed on Monday, further boosting its stock.
In a letter to shareholders, CEO Mary Barra emphasized the success of GM’s gas-powered trucks and SUVs and outlined plans to launch eight new or redesigned compact, mid-size, and full-size vehicle models in North America. Barra noted that production of the electric Chevrolet Equinox is ramping up, reassuring investors about the company’s commitment to disciplined volume growth despite some challenges in the electric vehicle (EV) market.
Earlier this month, Barra admitted that GM is unlikely to meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing the setback to a market slowdown. The company remains flexible, aiming to “build to demand,” though it did report a rise in EV sales last quarter.
Barra also shared updates regarding Cruise, GM’s self-driving unit, which had to scale back operations following an incident last October. The unit has decided to discontinue its Origin vehicle, opting instead to utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. The decision resulted in a $600 million charge for halting production of the Origin in Detroit.
During a call with analysts, Barra explained that using the Bolt would alleviate regulatory concerns linked to the unique design of the Origin, which does not feature a steering wheel. This shift will also help lower costs per unit and optimize 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 in China with SAIC Motor in light of ongoing losses. The company reported a $104 million loss in the second quarter, with SAIC-GM reducing production by 70% in June and delivering only 26,000 vehicles, a 50% decrease from the previous year, as reported by Automotive News.