General Motors has elevated several financial forecasts for 2024 following a robust second quarter that surpassed Wall Street predictions.
The company updated its expected adjusted earnings for the year, now projecting between $13 billion and $15 billion, an increase from the previous range of $12.5 billion to $14.5 billion. Additionally, GM raised its targets for operating cash flow and earnings per share, while slightly reducing the expectations for net income attributable to shareholders to a range of $10 billion to $11.4 billion.
In terms of revenue, GM reported $47.9 billion for the second quarter, marking a more than 7% rise compared to last year and exceeding Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, surpassing the anticipated $2.71 and reflecting a 60% increase from 2023. The net income also saw a 14% growth, amounting to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has increased more than 37% throughout the year. On Monday, GM announced a cash dividend for the third quarter, which contributed to the positive momentum of the stock.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, mentioning plans to introduce eight new or redesigned models in North America, covering compact, mid-size, and full-size segments. She also discussed the scaling of production for the electric Chevrolet Equinox, emphasizing GM’s commitment to disciplined volume growth despite earlier setbacks in electric vehicle (EV) production goals. Barra indicated that the company would be adaptable, promising to “build to demand,” although there was a noted increase in EV sales in the last quarter.
Barra disclosed that GM will discontinue its Cruise Origin vehicle, opting instead to focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a halt in Production of the Origin in Detroit, which cost the company $600 million. During discussions with analysts, Barra asserted that the use of the Bolt would mitigate regulatory concerns linked to the Origin’s distinctive design, which notably lacked a steering wheel. This change would also help reduce per-unit costs and optimize GM’s resources.
“Our vision to transform mobility using autonomous technology is unchanged,” Barra stated. “Every mile traveled and every simulation brings us closer because Cruise is an AI-first company.”
In addition, GM is working on restructuring its joint venture in China with SAIC Motor, which has been facing losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM significantly decreased production by 70% and delivered 26,000 vehicles, which is a 50% drop compared to the previous year, according to Automotive News.