General Motors has increased several financial targets for 2024 following an impressive second quarter that exceeded Wall Street’s expectations. The Detroit-based automaker has revised its forecast for adjusted earnings this year to between $13 billion and $15 billion, up from a prior range of $12.5 billion to $14.5 billion. Additionally, GM has updated its projections for operating cash flow and earnings per share, although it slightly lowered its expected net income for shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase compared to the same period last year and surpassing Wall Street’s estimate of $45 billion, according to FactSet. The company’s earnings per share reached $3.06, exceeding analysts’ expectations of $2.71 and representing a 60% increase from 2023. Net income rose 14% to $2.9 billion from $2.5 billion.
As a result of these announcements, GM’s stock surged nearly 5% in pre-market trading on Tuesday, with a year-to-date increase of over 37%. Following the trading close on Monday, GM also declared a cash dividend for the third quarter, which contributed to the stock’s rise.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs. She mentioned that the company is gearing up to launch eight new or redesigned vehicles across compact, mid-size, and full-size categories in North America. Barra emphasized that GM is ramping up production of the electric Chevrolet Equinox, reassuring shareholders of a commitment to disciplined volume growth despite earlier statements indicating a struggle to meet the goal of producing 1 million electric vehicles in North America by the end of 2025.
Furthermore, Cruise, GM’s self-driving division, is pivoting from its Origin vehicle to the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a production halt of the Origin after a prior incident. GM has incurred a $600 million charge related to ceasing Origin production.
In discussions with analysts, Barra noted that adopting the Bolt would ease regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. This strategy is expected to reduce costs per unit and optimize resource allocation.
GM is also working to restructure its joint venture in China with SAIC Motor, as it continues to experience losses, reporting a $104 million loss in the second quarter. In June, SAIC-GM cut production by 70%, delivering 26,000 vehicles, which is half of the quantity delivered a year earlier.