General Motors has increased its financial forecasts for 2024 after exceeding Wall Street expectations for its second quarter. The automaker has adjusted its anticipated 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 raised its targets for operating cash flow and earnings per share, while slightly lowering its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, representing a more than 7% increase from the previous year and surpassing the Wall Street projection of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, exceeding analysts’ expectations of $2.71 and marking a 60% increase from 2023. The company’s net income grew by 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has experienced an increase of over 37% this year. Additionally, GM declared a cash dividend for the third quarter, contributing to this stock boost.
In a communication to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, noting the ongoing launch of eight new or redesigned models in North America. She also mentioned progress in scaling up production of the electric Chevrolet Equinox, affirming the company’s commitment to controlled growth in electric vehicle production.
Barra acknowledged earlier this month 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. However, the company plans to remain adaptable and “build to demand,” although its EV sales did see growth in the last quarter.
Additionally, Barra revealed that Cruise, GM’s self-driving subsidiary, would discontinue its Origin vehicle and instead focus on employing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a significant setback for Cruise after an incident in October which necessitated a rollback of operations. GM incurred a $600 million charge linked to halting the production of the Origin in Detroit.
Barra indicated that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as the absence of a steering wheel. This adjustment is aimed at reducing costs per unit and optimizing GM’s resources.
“Our vision to transform mobility with autonomous technology remains steadfast,” Barra stated, emphasizing that every mile and simulation brings Cruise closer to its goals as an AI-driven company.
Moreover, GM is working on restructuring its joint venture in China with SAIC Motor due to ongoing losses, with the company reporting a $104 million loss for the second quarter. In June, production at SAIC-GM was cut by 70%, resulting in 26,000 vehicle deliveries, which is 50% lower than the same period last year, according to Automotive News.