General Motors is increasing its financial targets for 2024 following impressive results from its second quarter, surpassing Wall Street predictions. The Detroit-based automaker has raised its forecast for adjusted earnings for the year to between $13 billion and $15 billion, up from an earlier estimate of $12.5 billion to $14.5 billion. Additionally, GM has adjusted its targets for operating cash flow and earnings per share, while lowering its expectations for net income attributable to shareholders by less than 1%, now projected between $10 billion and $11.4 billion.
In the second quarter, GM reported a revenue of $47.9 billion, which represents an increase of over 7% compared to the previous year and exceeds the Wall Street estimate of $45 billion, according to FactSet. The earnings per share stood at $3.06, significantly higher than the expected $2.71 and a 60% increase year-over-year. Net income rose by 14% to $2.9 billion, compared to $2.5 billion in the same quarter last year.
As a result of these positive developments, GM’s stock rose nearly 5% in pre-market trading on Tuesday, bringing the stock’s overall increase to more than 37% this year. On Monday, GM announced a cash dividend for the third quarter, further boosting investor confidence.
In her letter to shareholders, CEO Mary Barra highlighted the strong performance of the company’s gas-powered trucks and SUVs and mentioned that GM is launching eight new or redesigned vehicle models in North America. She also discussed the ongoing production ramp-up for the electric Chevrolet Equinox, expressing enthusiasm for their electric vehicle (EV) initiatives while emphasizing a commitment to controlled growth.
Earlier in the month, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company plans to adapt production based on demand, although EV sales did see an increase in the last quarter.
Moreover, Barra announced that Cruise, GM’s self-driving division, will discontinue its Origin vehicle following a setback in operations last October. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This change comes as GM faced a $600 million charge linked to the halt of Origin production in Detroit.
During a call with analysts, Barra explained that using the Chevrolet Bolt would address regulatory concerns regarding the Origin’s design and would help reduce per-unit costs.
“Our vision to transform mobility using autonomous technology remains unchanged, and with each mile driven and every simulation, we move closer to our goals because Cruise operates as an AI-first company,” Barra stated.
Additionally, GM is working to restructure its joint venture in China with SAIC Motor amid ongoing financial losses, having recorded a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, which is a 50% decline from the previous year, according to industry reports.