General Motors has raised several financial projections for 2024 after exceeding Wall Street’s forecasts for the second quarter of the year.
The Detroit-based automotive giant increased its expected adjusted earnings for the year to a range of $13 billion to $15 billion, up from $12.5 billion to $14.5 billion. Additionally, it revised its targets for operating cash flow and earnings per share, while slightly reducing the net income forecast for shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the previous year and surpassing Wall Street’s expected $45 billion, according to FactSet estimates. Earnings per share reached $3.06, exceeding the $2.71 forecast by analysts and representing a 60% rise from 2023. The company’s net income rose 14% to $2.9 billion, compared to $2.5 billion last year.
Following these results, GM’s stock price surged nearly 5% in pre-market trading on Tuesday, reflecting an overall year-to-date increase of over 37%. The company declared a cash dividend for the third quarter, contributing to the stock’s positive performance.
In a communication to shareholders, CEO Mary Barra highlighted the strong demand for GM’s gas-powered trucks and SUVs. She mentioned the company is set to launch eight new or redesigned compact, mid-size, and full-size vehicle models in North America. Barra also noted that GM is ramping up production of the electric Chevrolet Equinox, emphasizing a commitment to disciplined volume growth despite earlier comments indicating that the company might not achieve its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown.
Furthermore, Barra announced that Cruise, GM’s autonomous vehicle unit, would discontinue its Origin vehicle model after experiencing setbacks in operations. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the production halt of the Origin in Detroit.
Barra reassured stakeholders that the strategy to innovate mobility through autonomous technology remains unchanged, with ongoing developments bringing the company closer to its goals.
In addition to these advancements, GM is working to restructure its joint venture with SAIC Motor in China, which has been experiencing financial losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is a 50% decrease from the previous year, according to industry reports.