General Motors has raised several financial forecasts for 2024 following a strong performance in the second quarter, exceeding Wall Street’s expectations.
The automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has elevated its targets for operating cash flow and earnings per share, although it slightly lowered its expectations for net income attributable to 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 last year and surpassing the Wall Street estimate of $45 billion. Earnings per share reached $3.06, exceeding the anticipated $2.71 and reflecting a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
In pre-market trading on Tuesday, GM’s stock surged nearly 5%, bringing its gains to over 37% for the year. Following the close of trading on Monday, GM announced a cash dividend for the third quarter, contributing to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned that the company is in the midst of launching eight new or redesigned models in North America. Barra emphasized the company’s commitment to scaling production of the electric Chevrolet Equinox, stating their excitement about electric vehicles (EVs) while maintaining a disciplined approach to volume growth.
Previously, Barra 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 market slowdown. The company plans to remain flexible and “build to demand,” although it did see an increase in EV sales last quarter.
Barra also mentioned that Cruise, GM’s self-driving division, is discontinuing its Origin vehicle and will instead prioritize testing the next-generation Chevrolet Bolt in Texas and Arizona. This decision comes after a $600 million charge related to pausing production of the Origin in Detroit.
During a call with analysts, Barra stated that utilizing the Bolt should address regulatory concerns associated with the unique design of the Origin, which lacks a steering wheel. This shift is expected to reduce per-unit costs and help GM optimize its resources.
“Our vision to transform mobility using autonomous technology remains unchanged, and with each mile traveled and every simulation, we move closer because Cruise is an AI-first company,” Barra expressed.
Additionally, GM is restructuring its joint venture with SAIC Motor in China after facing losses, recording a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, a drop of 50% from the same period last year, according to reports.