General Motors has raised several financial forecasts for 2024 following a significant beat of Wall Street expectations in its second quarter results.
The Detroit-based car manufacturer has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, although it slightly reduced the outlook for net income attributable to shareholders, which now stands at between $10 billion and $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, representing over a 7% rise year-over-year and exceeding Wall Street’s expectations of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, surpassing the anticipated $2.71 and showing a 60% increase compared to 2023. Net income also rose by 14% to $2.9 billion, up from $2.5 billion in the same period last year.
Following the announcements, GM’s stock price surged nearly 5% in pre-market trading on Tuesday and has seen an increase of more than 37% since the beginning of the year. The company also declared a third-quarter cash dividend after Monday’s trading session, contributing to the stock’s positive performance.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and outlined plans to launch eight new or redesigned compact, mid-size, and full-size models in North America. She mentioned that GM is ramping up production of the electric Chevrolet Equinox, emphasizing a commitment to careful growth in electric vehicle production.
Despite a recent acknowledgment that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown, the company has indicated its intention to be adaptable and “build to demand,” with electric vehicle sales rising last quarter.
Barra also announced that Cruise, GM’s self-driving division, will abandon its plans for the Origin vehicle, shifting focus to the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a $600 million charge related to the suspension of Origin production in Detroit.
During a conference call with analysts, Barra stated that utilizing the Bolt would address regulatory concerns regarding the Origin’s unconventional design, including its absence of a steering wheel. She noted that this strategy would reduce per unit costs and help optimize resources.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” said Barra.
GM is also working to restructure its joint venture with SAIC Motor in China, as the company continues to incur losses, reporting a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, a 50% drop compared to the previous year.