General Motors (GM) has increased several of its financial targets for 2024 after surpassing Wall Street’s expectations for its second-quarter performance.
The automaker has raised its projected adjusted earnings for the year to between $13 billion and $15 billion, a rise from the previous range of $12.5 billion to $14.5 billion. Additionally, GM has adjusted its targets for operating cash flow and earnings per share. However, it slightly lowered expectations for net income attributable to shareholders, adjusting the forecast to a range of $10 billion to $11.4 billion, representing a decrease of less than 1%.
In its second-quarter results, GM reported revenue of $47.9 billion, more than a 7% increase from the previous year, surpassing Wall Street’s expectation of $45 billion, as per FactSet estimates. Earnings per share stood at $3.06, exceeding the analyst expectation of $2.71 and reflecting a 60% increase from the previous year. The company also reported a 14% rise in net income to $2.9 billion, up from $2.5 billion.
Following this announcement, GM’s stock experienced a nearly 5% increase in pre-market trading. The stock has seen a rise of over 37% this year. On Monday, GM also announced a third-quarter cash dividend, contributing to the stock’s upward momentum.
CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs in a letter to shareholders, mentioning ongoing efforts to launch eight new or redesigned models across compact, mid-size, and full-size segments in North America. Barra emphasized that GM is ramping up production of the electric Chevrolet Equinox, stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Earlier this month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowing market. The company has committed to being flexible and will “build to demand,” although its electric vehicle sales did increase last quarter.
Barra also announced that Cruise, GM’s self-driving division which had to pause operations following an incident last October, would abandon its Origin vehicle project. Instead, Cruise will focus on deploying the next-generation Chevrolet Bolt during tests in Texas and Arizona. GM recorded a $600 million charge linked to the halted production of the Origin in Detroit.
During a call with analysts, Barra noted that utilizing the Bolt would help alleviate regulatory concerns regarding the Origin’s unconventional design, which did not include a steering wheel. This shift is expected to reduce costs per unit and enable GM to optimize its 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,” Barra stated.
Additionally, GM is attempting to restructure its joint venture with SAIC Motor in China due to ongoing losses, reporting a $104 million loss for the second quarter. In June, the SAIC-GM partnership reduced production by 70% and delivered 26,000 vehicles, marking a 50% drop compared to the same period last year, according to reports.