General Motors is adjusting its financial outlook for 2024 following a strong second quarter that exceeded Wall Street forecasts. The Detroit-based automaker has revised its expected adjusted earnings for the year to a range of $13 billion to $15 billion, increased 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, while slightly lowering the net income forecast for shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
For the second quarter, GM reported revenue of $47.9 billion, marking a growth of over 7% compared to the same period last year and surpassing Wall Street’s expectations of $45 billion, according to FactSet. The company’s earnings per share rose to $3.06, exceeding the analysts’ expectation of $2.71 per share and reflecting a 60% increase from 2023. Net income also saw a 14% increase, reaching $2.9 billion, up from $2.5 billion.
In pre-market trading, GM’s stock rose nearly 5%, contributing to an overall increase of more than 37% in its value this year. The company also declared a third-quarter cash dividend, which positively impacted its stock performance.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She mentioned the company’s ongoing efforts to launch eight new or redesigned models across different sizes in North America. Barra also reaffirmed GM’s commitment to controlled growth in electric vehicle (EV) production, particularly for the Chevrolet Equinox, despite acknowledging that the goal of producing 1 million EVs in North America by the end of 2025 would not be met due to a market slowdown.
Furthermore, Barra announced adjustments in GM’s self-driving unit, Cruise, which will no longer pursue its Origin vehicle and instead will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision came after a $600 million charge related to the halted production of the Origin.
During an analyst call, Barra emphasized that utilizing the Bolt would address regulatory concerns linked to the Origin’s unconventional design, such as the absence of a steering wheel. This shift aims to reduce unit costs and optimize resources within the company.
GM is also striving to restructure its joint venture with SAIC Motor in China, having reported a loss of $104 million in the second quarter. Earlier this year, SAIC-GM significantly reduced production, delivering 26,000 vehicles, or 50% fewer than in the previous year.