General Motors has increased several financial forecasts for 2024 following a strong performance in its second quarter that exceeded Wall Street expectations. The Detroit-based automaker has raised its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, targets for operating cash flow and earnings per share have also been elevated, while expectations for net income attributable to shareholders have been slightly lowered, now estimated between $10 billion and $11.4 billion.
In the second quarter, GM reported a revenue of $47.9 billion, surpassing Wall Street’s expectation of $45 billion and marking a more than 7% increase from the previous year. Earnings per share reached $3.06, considerably higher than the anticipated $2.71 and representing a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, with an overall increase of over 37% this year. The company also announced a third-quarter cash dividend, providing an additional boost to the stock.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of its gas-powered trucks and SUVs, and mentioned that the company is set to introduce eight new or redesigned models across compact, mid-size, and full-size categories in North America. She emphasized GM’s commitment to disciplined growth in electric vehicles, including the ramp-up of production for the electric Chevrolet Equinox. Despite this, Barra noted that GM will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a market slowdown.
Barra also announced that Cruise, GM’s self-driving unit, will discontinue its Origin vehicle in favor of the next-generation Chevrolet Bolt for testing purposes in Texas and Arizona. This decision follows a halt in operations after an incident last year, with GM recording a $600 million charge related to the stoppage of the Origin’s production in Detroit.
In addressing concerns from regulators about the Origin’s design, which lacks a steering wheel, Barra pointed out that using the Bolt would mitigate these issues. She stated that the change would reduce costs per unit and optimize resource allocation for the company.
Furthermore, GM is working on restructuring its joint venture with SAIC Motor in China, as the company continues to face losses, including a $104 million loss recorded in the second quarter. Production cuts by SAIC-GM in June resulted in a 70% decrease, totaling 26,000 vehicle deliveries, which is a 50% decline compared to the previous year.