General Motors has updated its financial forecasts for 2024 following a strong performance in the second quarter, surpassing Wall Street expectations. The automaker now anticipates adjusted earnings for the year to be between $13 billion and $15 billion, an increase from the earlier projection of $12.5 billion to $14.5 billion. Additionally, GM raised its targets for operating cash flow and earnings per share, although the expected net income attributable to shareholders was slightly lowered by less than 1%, now projected to be between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% increase from the same period last year and exceeding Wall Street’s expectation of $45 billion. The company’s earnings per share reached $3.06, surpassing the $2.71 forecasted by analysts and representing a 60% increase compared to 2023. Net income also rose by 14% to $2.9 billion, compared to $2.5 billion last year.
In pre-market trading, GM’s stock saw a rise of nearly 5%, contributing to an overall increase of over 37% in value this year. Following the market close on Monday, GM announced a cash dividend for the third quarter, further boosting investor confidence.
CEO Mary Barra highlighted the strong performance of the company’s gas-powered trucks and SUVs, and mentioned that GM is set to launch eight new or redesigned vehicle models in North America. She also discussed the scaling production of the electric Chevrolet Equinox, emphasizing GM’s commitment to disciplined growth in the electric vehicle sector.
Despite the optimism, 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 market slowdown. The company plans to adapt and “build to demand,” although their EV sales did see an increase in the last quarter.
Barra also announced a shift in strategy for Cruise, GM’s self-driving unit, which will no longer pursue the production of its Origin vehicle. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing its self-driving technology in Texas and Arizona. GM incurred a $600 million charge due to the halted production of the Origin model in Detroit.
In a discussion with analysts, Barra stated that using the Bolt would address regulatory concerns surrounding the Origin’s unconventional design. This strategic change is expected to lower production costs and help GM optimize its resources.
Lastly, GM is working to restructure its joint venture in China with SAIC Motor, as the partnership continues to incur losses, including a $104 million loss for the second quarter. Earlier this year, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, which is 50% less than the previous year.