General Motors has raised several financial targets for 2024 following robust second-quarter performance that exceeded Wall Street predictions. The Detroit-based automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, an uptick from the previous forecast of $12.5 billion to $14.5 billion. Additionally, targets for operating cash flow and earnings per share have also been elevated, although the expectation for net income attributable to shareholders has been slightly reduced by less than 1%, now estimated between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking an increase of over 7% from the year before and surpassing Wall Street’s expected $45 billion. Earnings per share were recorded at $3.06, exceeding analyst forecasts of $2.71 and up 60% from 2023. The company’s net income rose by 14%, reaching $2.9 billion compared to $2.5 billion last year.
Following this news, GM’s stock surged nearly 5% in pre-market trading on Tuesday, with the share price having increased over 37% since the beginning of the year. The company also announced a third-quarter cash dividend after market close on Monday, further boosting the stock.
In correspondence with shareholders, GM CEO Mary Barra highlighted the strong performance of the company’s gas-powered trucks and SUVs. She also mentioned the launch of eight new or redesigned models in North America, including the electric Chevrolet Equinox. Barra stated that while there is enthusiasm surrounding electric vehicles (EVs), GM is focused on maintaining disciplined volume growth.
Earlier this month, Barra conceded that GM would not achieve its target of producing 1 million electric vehicles in North America by the end of 2025 due to market challenges. She emphasized that the company plans to remain adaptable and align production with market demand, noting that EV sales did see a rise in the last quarter.
Furthermore, Barra announced that Cruise, GM’s autonomous vehicle division, has decided to discontinue its Origin vehicle, which faced operational setbacks after an incident last October. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for testing its vehicles in Texas and Arizona. This decision also comes after GM incurred a $600 million charge due to the halted production of the Origin in Detroit.
During an analyst call, Barra indicated that shifting to the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. This change is expected to reduce costs per unit and enhance resource optimization.
GM is also working to restructure its joint venture with SAIC Motor in China due to ongoing financial losses, with a reported loss of $104 million in the second quarter. Earlier, SAIC-GM reduced production by 70% and delivered 26,000 vehicles, which is 50% lower than the previous year, according to industry reports.