General Motors has increased several financial forecasts for 2024 after exceeding Wall Street’s estimates in its second quarter results.
The company has raised its adjusted earnings forecast for the year to between $13 billion and $15 billion, up from an earlier range of $12.5 billion to $14.5 billion. Additionally, GM has enhanced its expectations for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
In its second-quarter report, GM announced revenue of $47.9 billion, representing an increase of over 7% from the previous year and surpassing the Wall Street estimate of $45 billion. Earnings per share reached $3.06, exceeding the expected $2.71, and showing a 60% increase from 2023. The company’s net income rose 14%, reaching $2.9 billion compared to $2.5 billion last year.
As a result of these positive results, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has increased more than 37% so far this year. The company also declared a third-quarter cash dividend after Monday’s market close, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of its gas-powered trucks and SUVs and mentioned the launch of eight new or redesigned vehicle models in North America. Barra reaffirmed GM’s commitment to scaling up production of the electric Chevrolet Equinox, emphasizing disciplined volume growth alongside excitement for electric vehicles.
Barra previously indicated 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 is adjusting its production strategy to “build to demand,” although it did experience growth in EV sales during the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving unit, would discontinue its Origin vehicle following operational setbacks last October. Cruise plans to focus on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the halt in Origin production.
During a conference call with analysts, Barra explained that utilizing the Bolt would address regulatory concerns linked to the Origin’s unique design, such as the absence of a steering wheel. This transition is expected to reduce costs per unit and help GM better allocate its resources.
Despite ongoing losses, GM is working to restructure its joint venture in China with SAIC Motor, which reported a loss of $104 million in the second quarter. In June, the SAIC-GM joint venture reduced production by 70%, delivering only 26,000 vehicles, a 50% decline compared to the previous year.