General Motors (GM) has raised several of its financial targets for 2024 following a stronger-than-expected performance in the second quarter. The Detroit-based automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, moving up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM adjusted its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported a revenue of $47.9 billion, reflecting a more than 7% increase from the prior year and surpassing Wall Street’s expectations of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, which is higher than the anticipated $2.71 and represents a 60% increase compared to the same quarter in 2023. The company also saw its net income grow by 14%, amounting to $2.9 billion, up from $2.5 billion.
As a result of these positive developments, GM’s stock price surged almost 5% in pre-market trading, with the stock climbing over 37% this year. In a move to reward shareholders, GM announced a third-quarter cash dividend just before the market closed on Monday.
In a letter to shareholders, CEO Mary Barra highlighted the success of its gasoline-powered trucks and SUVs and announced plans to launch eight new or redesigned models in North America. She also provided updates on the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined volume growth in the electric vehicle (EV) sector. However, Barra acknowledged the company would not meet its target of producing 1 million EVs in North America by the end of 2025 due to a market slowdown, but assured that the company remains flexible in aligning production to demand.
Additionally, Barra shared that Cruise, GM’s self-driving technology unit, will discontinue its Origin vehicle and instead focus on the next-generation Chevrolet Bolt for testing operations in Texas and Arizona. This change comes after Cruise faced operational challenges after an incident last October. The switch is expected to address regulatory concerns about the Origin’s design and aid in cost reduction.
Moreover, GM is looking to restructure its joint venture in China with SAIC Motor, which has faced profitability issues, leading to a reported loss of $104 million in the second quarter. The partnership recently reduced production by 70%, resulting in a significant drop in vehicle deliveries.
Overall, GM’s recent performance and strategic adjustments reflect a positive outlook, balancing strong earnings with a commitment to innovation in electrification and autonomous driving technology. These efforts not only bolster shareholder confidence but also position GM to adapt to the evolving automotive landscape.
This development emphasizes the resilience of GM as it navigates challenges and capitalizes on its opportunities in both traditional and electric vehicle markets, signaling a hopeful future for the company and its stakeholders.