General Motors has announced the elevation of several financial targets for 2024 following an impressive second-quarter performance that exceeded Wall Street’s expectations. The automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Alongside this, GM also raised its forecasts for operating cash flow and earnings per share, while slightly reducing expectations for net income attributable to shareholders by less than 1%, now anticipated to be 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 prior year and surpassing Wall Street’s expectation of $45 billion, as per FactSet estimates. The company’s earnings per share reached $3.06, exceeding the $2.71 anticipated by analysts and demonstrating a remarkable 60% increase since 2023. Net income climbed 14%, amounting to $2.9 billion, compared to $2.5 billion from the previous year.
These strong results prompted a nearly 5% jump in GM’s stock during pre-market trading on Tuesday. The stock has witnessed a significant climb of over 37% this year. Additionally, following the close of trading on Monday, GM announced a cash dividend for the third quarter, contributing to the positive stock performance.
In a communication to shareholders, CEO Mary Barra expressed pride in the company’s sales of gas-powered trucks and SUVs. She also highlighted the impending launch of eight new or redesigned vehicle models across various segments in North America. Barra confirmed GM’s commitment to ramping up production of the electric Chevrolet Equinox, emphasizing a balanced approach to growth in the electric vehicle (EV) sector despite a previously stated goal of producing 1 million EVs in North America by the end of 2025, which now appears unattainable due to market fluctuations. Regardless, she noted that GM’s EV sales saw an increase last quarter.
Furthermore, CEO Barra updated the progress of GM’s autonomous vehicle unit, Cruise, which recently had to scale back operations post an incident in October. The company has decided to move away from its Origin vehicle and pivot towards using the next-generation Chevrolet Bolt as it continues testing its vehicles in Texas and Arizona. This strategic shift comes after GM incurred a $600 million charge due to the pause in Origin production.
Barra reassured stakeholders of GM’s unwavering vision for transforming mobility through autonomous technology, emphasizing that advancements in AI will continue to drive Cruise forward.
In light of recent developments, GM is also restructuring its joint venture in China with SAIC Motor, which has experienced losses, reporting a $104 million loss in the second quarter. Notably, production from SAIC-GM was cut by 70% in June, with vehicle deliveries dropping to 26,000—50% less than the previous year.
Despite the challenges, GM’s ongoing commitment to innovation and growth in both the traditional and electric vehicle markets paints a hopeful picture for the company moving forward. The proactive adjustments in strategy reflect a resilient approach to market demands and technological advancements.
Summary: General Motors is raising its financial targets for 2024 following a strong second quarter with higher-than-expected earnings. The company reported significant revenue growth and a solid increase in stock value. While facing challenges in the electric vehicle segment and restructuring its joint venture in China, GM remains focused on innovation and plans to launch new models. CEO Mary Barra emphasizes the company’s commitment to transitioning towards autonomous technology.