General Motors is increasing several financial projections for 2024 after exceeding Wall Street’s expectations in its second-quarter performance.
The automaker has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from a prior forecast of $12.5 billion to $14.5 billion. Additionally, GM has adjusted its targets for operating cash flow and earnings per share. However, the net income forecast attributable to shareholders has been slightly decreased to between $10 billion and $11.4 billion, a reduction of less than 1%.
In the second quarter, revenue reached $47.9 billion, marking over a 7% increase compared to the same period last year and surpassing the $45 billion anticipated by analysts, according to FactSet estimates. Earnings per share for the quarter stood at $3.06, exceeding analysts’ expectations of $2.71 per share and indicating a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock surged nearly 5% in pre-market trading on Tuesday, contributing to an overall increase of over 37% in stock value during the year. GM also declared a cash dividend for the third quarter, which further supported the stock’s rise.
In her letter to shareholders, CEO Mary Barra highlighted the successful sales of gas-powered trucks and SUVs, and announced plans to introduce eight new or redesigned vehicles of various sizes in North America. Barra reassured shareholders about the scaling of production for the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in electric vehicle (EV) production.
However, Barra acknowledged earlier this month that GM would fall short of its goal to produce 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company intends to remain flexible and produce according to demand, despite experiencing growth in EV sales last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, would abandon the production of its Origin vehicle, which had previously faced a reduction in operations after a setback last October. Instead, Cruise will concentrate on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. The company has incurred a $600 million charge related to halting Origin production in Detroit.
During an analyst call, Barra stated that utilizing the Bolt would address regulatory concerns related to the unique design of the Origin, which lacked a steering wheel. This shift is expected to reduce costs per unit and help GM optimize its resources.
GM is also working to restructure its joint venture with SAIC Motor in China, which has been experiencing losses. The company reported a $104 million loss for the second quarter. In June, SAIC-GM significantly cut production by 70%, delivering 26,000 vehicles, which is 50% less than the previous year.