General Motors has revised several financial forecasts for 2024 following a strong performance that exceeded Wall Street expectations for its second quarter. The automaker has adjusted its anticipated adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share. However, the prediction for net income attributable to shareholders was slightly decreased to a range of $10 billion to $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, marking an over 7% increase year-over-year and surpassing the Wall Street estimate of $45 billion. Earnings per share reached $3.06, exceeding the $2.71 expected by analysts and representing a 60% increase compared to the previous year. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
Following this announcement, GM’s stock surged nearly 5% in pre-market trading, contributing to an overall rise of more than 37% in stock value this year. Additionally, GM declared a cash dividend for the third quarter, providing further support for its stock performance.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs and mentioned that GM is set to introduce eight new or redesigned models in North America. Barra also discussed the scaling up of production for the electric Chevrolet Equinox, expressing excitement about electric vehicles (EVs) while emphasizing the need for disciplined growth.
Despite previous goals, Barra noted earlier this month that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a current market slowdown. The company aims to remain flexible and meet demand, even as EV sales saw growth last quarter.
Barra also revealed that Cruise, GM’s self-driving division, would discontinue the Origin vehicle following operational setbacks last October. Instead, Cruise will concentrate on the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the halted production of the Origin in Detroit.
During an analyst call, Barra indicated that utilizing the Bolt would address regulatory concerns regarding the Origin’s unconventional design, ultimately reducing costs and optimizing resources.
“Our vision to transform mobility using autonomous technology remains steadfast, and every mile traveled and simulation brings us closer to our goals, as Cruise is an AI-first company,” Barra stated.
Furthermore, GM is working on restructuring its joint venture in China with SAIC Motor, as it has been experiencing losses, including a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is 50% less than the previous year, according to reports.