General Motors has adjusted several of its financial forecasts for 2024 following a strong second quarter that surpassed Wall Street expectations.
The automaker from Detroit has increased its forecast for adjusted earnings 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 the projections for net income attributable to shareholders have been slightly reduced by less than 1%, now estimated between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, a more than 7% rise from the same period last year, which was higher than the anticipated $45 billion according to FactSet estimates. The earnings per share were recorded at $3.06, surpassing analysts’ expectations of $2.71 and reflecting a 60% increase from the previous year. Net income also grew by 14%, reaching $2.9 billion compared to $2.5 billion in 2023.
Following the announcement, GM’s stock soared nearly 5% in pre-market trading on Tuesday, marking an increase of over 37% for the year. The company also declared a cash dividend for the third quarter, which contributed positively to its stock performance.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned the launch of eight new or redesigned models across various sizes in North America. She also discussed the scaling up of production for the electric Chevrolet Equinox, emphasizing GM’s commitment to disciplined growth despite recent achievements in electric vehicle sales.
However, Barra acknowledged that GM is unlikely to meet its ambitious target of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. The company intends to adapt its production based on demand, although EV sales did show growth in the last quarter.
In a separate update, Barra announced that Cruise, GM’s self-driving division, will abandon its Origin vehicle project, which had previously been put on hold after an incident last October. Instead, Cruise will concentrate on testing next-generation Chevrolet Bolts in Texas and Arizona. GM incurred a $600 million charge due to the suspension of the Origin’s production in Detroit.
During discussions with analysts, Barra noted that utilizing the Bolt would address regulatory concerns regarding the Origin’s unconventional design, which lacked a steering wheel. She added that the shift would help reduce costs and improve resource allocation.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, stating, “Our vision to transform mobility using autonomous technology is unchanged.”
Moreover, GM is working on restructuring its joint venture with SAIC Motor in China, as the partnership continues to face losses. In the second quarter, GM reported a loss of $104 million related to this venture. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is a 50% decline compared to the same time last year, according to reports from Automotive News.