General Motors has raised several financial targets for 2024 after exceeding Wall Street’s expectations in its second-quarter results.
The Detroit-based automaker increased its projected adjusted earnings for the year to between $13 billion and $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. It also revised its targets for operating cash flow and earnings per share. However, the expectations for net income attributable to shareholders were slightly lowered by less than 1%, now projected between $10 billion and $11.4 billion.
For 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 anticipated $45 billion, as per FactSet estimates. Earnings per share reached $3.06, which is above the $2.71 forecasted by analysts and represents a 60% increase from 2023. The company’s net income rose 14%, climbing to $2.9 billion from $2.5 billion.
Following this announcement, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has gained over 37% this year. After the market closed on Monday, GM declared a cash dividend for the third quarter, further boosting its stock.
In a letter to shareholders, CEO Mary Barra celebrated the strong performance of GM’s gas-powered trucks and SUVs. She highlighted the company’s strategy to launch eight new or redesigned models in North America, including compact, mid-size, and full-size variants. Barra also mentioned GM’s commitment to scaling production of the electric Chevrolet Equinox, emphasizing a disciplined approach to volume growth amidst excitement over electric vehicle success.
Earlier this month, Barra acknowledged that GM would not reach its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. The company expressed a flexible production strategy, indicating it would “build to demand,” although EV sales did experience growth in the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving unit, will cease production of its Origin vehicle after having to scale back operations last October. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona, following a $600 million charge related to halting Origin production in Detroit.
Barra noted that using the Bolt would help alleviate regulatory concerns regarding the unique design of the Origin and would also reduce costs per unit while optimizing resources.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” said Barra.
In other developments, GM is working to restructure its joint venture in China with SAIC Motor due to ongoing losses, which amounted to $104 million in the second quarter. Production cuts were implemented by SAIC-GM, resulting in a 70% reduction and a delivery of 26,000 vehicles—50% less than the previous year, according to Automotive News.