General Motors has updated its financial forecasts for 2024 after significantly exceeding Wall Street’s expectations for its second-quarter performance.
The Detroit-based automaker has revised its forecast for adjusted earnings to range between $13 billion and $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, it increased targets for operating cash flow and earnings per share. However, the outlook for net income attributable to shareholders was slightly lowered to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, representing a more than 7% increase from the previous year and surpassing Wall Street’s expectations of $45 billion. The earnings per share were reported at $3.06, exceeding analysts’ predictions of $2.71 per share and reflecting a 60% increase compared to 2023. Net income also saw a 14% rise to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock price rose nearly 5% in pre-market trading on Tuesday, contributing to an over 37% increase in the stock’s value this year. Additionally, GM declared a cash dividend for the third quarter after the market closed on Monday, further boosting the stock.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs. She mentioned that GM is in the process of launching eight new or redesigned compact, mid-size, and full-size models in North America. Barra also emphasized that GM is increasing production of the electric Chevrolet Equinox, stating a commitment to disciplined volume growth despite acknowledging that the goal of producing 1 million electric vehicles in North America by the end of 2025 will not be met due to a market slowdown.
Barra announced that GM’s self-driving unit, Cruise, which had to scale back following an incident last October, will discontinue the Origin vehicle design and instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the suspension of the Origin’s production in Detroit.
During a conference call, Barra explained that using the Bolt would address regulatory concerns regarding the unique design of the Origin, such as its absence of a steering wheel. This transition is expected to reduce costs per unit and optimize resources for the company.
Moreover, GM is working to reconfigure its joint venture with SAIC Motor in China, facing ongoing losses that amounted to $104 million in the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, which is a 50% drop compared to the previous year.