General Motors has upgraded multiple financial forecasts for 2024 following impressive second-quarter results that exceeded Wall Street projections.
The automaker has increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous $12.5 billion to $14.5 billion. Additionally, it has set higher targets for operating cash flow and earnings per share. However, expectations for net income attributable to shareholders have been slightly reduced by less than 1%, now estimated to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% increase from the previous year and surpassing Wall Street’s estimate of $45 billion, according to FactSet. The earnings per share reached $3.06, exceeding analysts’ expectations of $2.71 and marking a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM stock surged nearly 5% in pre-market trading on Tuesday, with the stock having risen over 37% this year. On the previous trading day, GM declared a cash dividend for the third quarter, further boosting investor sentiment.
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 compact, mid-size, and full-size categories in North America. She also discussed the ramp-up of production for the electric Chevrolet Equinox, emphasizing that while GM is enthusiastic about its electric vehicles and initial success, it remains committed to disciplined volume growth.
Earlier this month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, citing a slowdown in the market. The company intends to adapt by building according to demand, even though its electric vehicle sales did see growth in the last quarter.
Additionally, Barra announced a strategic shift for Cruise, GM’s self-driving unit, which had to scale back operations after an incident last October. Cruise will discontinue its Origin vehicle and will concentrate on deploying the next-generation Chevrolet Bolt in its tests in Texas and Arizona. GM incurred a $600 million charge linked to the stoppage of Origin production in Detroit.
During an analyst call, Barra stated that utilizing the Bolt would address regulatory concerns associated with the Origin’s unconventional design, such as its lack of a steering wheel. This change is expected to reduce unit costs and optimize GM’s resources.
“Our vision to transform mobility using autonomous technology remains unchanged, and each mile traveled and every simulation brings us closer because Cruise operates as an AI-first company,” Barra said.
GM is also working on restructuring its joint venture with SAIC Motor in China, as the company continues to face losses, reporting a loss of $104 million for the second quarter. In June, SAIC-GM cut production by 70%, delivering 26,000 vehicles, which is 50% less than the previous year, as reported by Automotive News.