General Motors has revised its financial forecasts for 2024 following a strong performance that exceeded Wall Street expectations for the second quarter.
The automaker has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM adjusted its targets for operating cash flow and earnings per share, while slightly lowering the net income estimate for shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase from the previous year and surpassing the $45 billion projection by analysts. The company’s earnings per share reached $3.06, exceeding the expected $2.71 per share and representing a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following the financial results announcement, GM’s stock surged nearly 5% in pre-market trading, bringing its gains to over 37% for the year. The company also declared a third-quarter cash dividend, further enhancing its stock appeal.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of its gas-powered trucks and SUVs, while outlining plans to launch eight new or redesigned truck and SUV models in North America. She mentioned scaling production for the electric Chevrolet Equinox and reaffirmed GM’s commitment to disciplined growth within the electric vehicle market, despite estimating that it will not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns.
Additionally, Barra announced that Cruise, GM’s self-driving unit, will abandon its Origin vehicle initiative and will instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. This strategic shift follows a $600 million charge related to the suspension of Origin production in Detroit.
During a call with analysts, Barra explained that using the Bolt would help address regulators’ concerns regarding the unique design of the Origin, which lacked a steering wheel, while also reducing per unit costs and optimizing resources.
Despite these challenges, Barra reiterated GM’s commitment to transforming mobility through autonomous technology, noting that each mile traveled and simulation gets the company closer to that vision.
GM is also in the process of restructuring its joint venture in China with SAIC Motor, which has faced financial losses, reporting a $104 million deficit in the second quarter. In June, SAIC-GM scaled back production by 70%, delivering 26,000 vehicles, a drop of 50% compared to the previous year.