General Motors is updating its financial goals for 2024 after exceeding Wall Street’s expectations for its second quarter results.
The Detroit-based automaker raised its forecast for adjusted earnings, now anticipating between $13 billion and $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. It also increased its targets for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders was adjusted slightly downward, now projected to be between $10 billion and $11.4 billion.
During the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the prior year and surpassing the expected $45 billion target, according to estimates from FactSet. The earnings per share stood at $3.06, exceeding analysts’ expectations of $2.71 per share and reflecting a 60% increase compared to 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
As a result of these positive earnings, GM’s stock rose nearly 5% in pre-market trading on Tuesday, and has increased more than 37% this year. Following the close of trading on Monday, GM also declared a cash dividend for the third quarter, giving its stock an additional boost.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, and she announced plans to launch eight new or redesigned models across compact, mid-size, and full-size categories in North America. Barra mentioned that GM is ramping up production of the electric Chevrolet Equinox, emphasizing the company’s commitment to sustainable growth, despite previous remarks indicating that GM would not achieve its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown.
Additionally, Barra introduced changes to Cruise, GM’s self-driving division, which recently scaled back operations after an incident last October. The division will abandon its Origin vehicle concept and concentrate on testing next-generation Chevrolet Bolt vehicles in Texas and Arizona. GM incurred a $600 million charge due to the suspension of Origin production in Detroit.
In discussions with analysts, Barra explained that using the Bolt would help alleviate any regulatory concerns about the unique features of the Origin, such as its lack of a steering wheel. This approach would also reduce per unit costs and allow GM to better allocate its resources.
Barra reiterated GM’s commitment to advancing autonomous technology. The company is also working on restructuring its joint venture with SAIC Motor in China as it continues to face losses, having recorded a $104 million loss for the second quarter. Earlier in June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is a 50% drop compared to the previous year.