General Motors has increased several financial forecasts for 2024 after significantly exceeding Wall Street’s predictions for its second quarter performance.
The Detroit-based automaker has raised its projected adjusted earnings for the year to between $13 billion and $15 billion, an increase from an earlier forecast of $12.5 billion to $14.5 billion. Additionally, GM has updated 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 revenues of $47.9 billion, marking a more than 7% increase compared to the same period last year and surpassing the $45 billion anticipated by analysts, according to FactSet. The company’s earnings per share reached $3.06, exceeding the expected $2.71 and showcasing a 60% increase from 2023. Net income also rose by 14%, reaching $2.9 billion, up from $2.5 billion.
As a result, GM’s stock surged nearly 5% in pre-market trading on Tuesday, contributing to an overall increase of more than 37% this year. Following the close of trading on Monday, GM announced a cash dividend for the third quarter, further boosting the stock’s appeal.
In a letter to shareholders, CEO Mary Barra emphasized the success of GM’s gas-powered trucks and SUVs, mentioning that the company plans to launch eight new or redesigned models across various sizes in North America. Barra indicated that GM is ramping up production of the electric Chevrolet Equinox, reaffirming the company’s commitment to “disciplined volume growth.”
Earlier this month, Barra acknowledged that GM will likely fall short of its goal to produce 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company plans to remain adaptable and “build to demand,” although its electric vehicle sales did see growth last quarter.
Additionally, Barra announced a shift for Cruise, GM’s self-driving unit which had to scale back operations after an incident last October. The unit will abandon its Origin vehicle and instead focus on testing next-generation Chevrolet Bolts in Texas and Arizona. GM incurred a $600 million charge related to the production halt of the Origin in Detroit.
During an analyst call, Barra explained that utilizing the Bolt would alleviate regulatory concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. This change is expected to reduce costs per unit and enhance GM’s resource optimization.
GM is also working to restructure its joint venture with SAIC Motor in China as it continues to experience losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, leading to the delivery of 26,000 vehicles, which is 50% fewer than the previous year, according to reports.