General Motors has announced an increase in its financial projections for 2024, following a stellar performance that exceeded Wall Street’s expectations for its second quarter results.
The Detroit-based automaker has raised its adjusted earnings forecast for the year to between $13 billion and $15 billion, compared to the previous estimate of $12.5 billion to $14.5 billion. Additionally, it has increased its targets for operating cash flow and earnings per share. The forecast for net income attributable to shareholders has been slightly lowered by less than 1%, now projected to be between $10 billion and $11.4 billion.
In its second-quarter report, GM reported revenue of $47.9 billion, marking a more than 7% increase year-on-year and surpassing the Wall Street expectation of $45 billion, as per FactSet estimates. Earnings per share were reported at $3.06, exceeding the analyst expectation of $2.71 and representing a 60% increase compared to the same period in 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion in the previous year.
In response to these positive results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, bringing the stock’s total increase to over 37% for the year. Following the market close on Monday, GM announced a cash dividend for the third quarter, contributing to the stock’s favorable performance.
In a letter addressed to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs. She mentioned that GM is in the process of launching eight new or redesigned models across compact, mid-size, and full-size categories in North America. Additionally, Barra emphasized the company’s commitment to disciplined growth in the production of its electric Chevrolet Equinox, expressing excitement about the early successes of their electric vehicles (EVs).
Earlier this month, Barra acknowledged that GM may not achieve its target of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. However, the company plans to remain flexible and build to demand, while noting that EV sales did see growth in the last quarter.
Barra also announced a strategic shift for Cruise, GM’s self-driving division, which is withdrawing its Origin vehicle concept after experiencing operational setbacks last October. Instead, Cruise will pivot towards utilizing the next-generation Chevrolet Bolt as it conducts vehicle tests in Texas and Arizona. GM incurred a $600 million charge due to the suspension of Origin production in Detroit.
During an analyst call, Barra reassured that this pivot would help address regulatory concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. The shift is expected to reduce costs per unit and allow GM to optimize its resources.
Barra reiterated GM’s steadfast vision to transform mobility through autonomous technology, stating that every mile and simulation brings the company closer to its goals, reinforcing that Cruise is focused on artificial intelligence as its foundation.
Lastly, GM is working on restructuring its joint venture in China with SAIC Motor as it faces ongoing losses; the company reported a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70% and delivered 26,000 vehicles, which is a 50% drop from the previous year, according to Automotive News.