General Motors has elevated several financial forecasts for 2024 following a strong performance that exceeded Wall Street’s expectations for its second quarter.
The Detroit-based automotive giant has increased its projected 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, the company revised its targets for operating cash flow and earnings per share. The forecast for net income attributable to shareholders was slightly reduced by less than 1%, now predicted to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% rise compared to the same period last year and surpassing Wall Street’s expectation of $45 billion, as noted in FactSet estimates. Earnings per share reached $3.06, exceeding analysts’ anticipated $2.71 and showing a 60% increase from 2023. Net income increased by 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has risen over 37% this year. The company also declared a third-quarter cash dividend after trading closed on Monday, contributing to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs and indicated that GM is set to launch eight new or redesigned models in North America across different vehicle categories. Barra emphasized that GM is ramping up production of the electric Chevrolet Equinox, stating that while there is enthusiasm for electric vehicles, the company remains committed to disciplined growth.
Earlier this month, Barra acknowledged that GM would miss its target of producing 1 million electric vehicles in North America by the end of 2025, attributing the shortfall to a slowdown in the market. The company has reiterated its flexibility in production, promising to “build to demand,” although it reported growth in EV sales in the last quarter.
Barra also announced that Cruise, GM’s self-driving division which had scaled back operations following an incident last year, will discontinue its Origin vehicle in favor of utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes with a $600 million charge related to the suspension of Origin production in Detroit.
During a discussion with analysts, Barra mentioned that using the Bolt would address regulators’ concerns regarding the unique design features of the Origin, such as the absence of a steering wheel. She added that this shift would help lower costs per unit and optimize resources for GM.
“Our vision to transform mobility using autonomous technology remains unchanged,” Barra stated, emphasizing that each mile and simulation brings Cruise closer to its goals as an AI-first company.
Furthermore, GM is working to restructure its joint venture with SAIC Motor in China, as the operation continues to experience financial losses, including a reported $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70% and delivered just 26,000 vehicles, representing a 50% decrease compared to the previous year, according to Automotive News.