General Motors (GM) has announced an upward revision of its financial targets for 2024 following a strong performance in the second quarter that exceeded Wall Street projections. The automaker has increased its expected adjusted earnings for the year to a range of $13 billion to $15 billion, a notable change from the previous forecast of $12.5 billion to $14.5 billion. GM has also raised its targets for operating cash flow and earnings per share, although it slightly lowered expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In terms of revenue, GM reported a substantial $47.9 billion for the second quarter, representing a year-over-year increase of more than 7% and surpassing Wall Street’s expectation of $45 billion. Earnings per share reached $3.06, significantly exceeding the anticipated $2.71 and marking a 60% increase compared to the same quarter in 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion in the previous year.
Following these promising results, GM’s stock saw a nearly 5% increase in pre-market trading. The company has seen its stock value rise over 37% this year, and it declared a cash dividend for the third quarter, further enhancing investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the successes of GM’s gas-powered trucks and SUVs, and noted the company’s plans to launch eight new or redesigned models across various vehicle categories in North America. She also addressed the production scaling of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in the electric vehicle (EV) sector. Despite some setbacks, including a revision of its goal for producing 1 million electric vehicles by 2025 due to market challenges, GM is demonstrating adaptability by “building to demand.”
Barra also discussed changes regarding GM’s self-driving unit, Cruise, which will now focus on the next generation Chevrolet Bolt after deciding to discontinue its Origin vehicle. This pivot aims to align better with regulatory standards and optimize resources.
Moreover, GM is currently working to reorganize its joint venture in China with SAIC Motor, with GM reporting a $104 million loss in the second quarter attributed to this partnership. Production cuts were made, resulting in a 70% decline and a reduced vehicle delivery rate of 26,000 units, which is 50% lower than last year.
Overall, GM’s promising financial reports and strategic adjustments reflect its resilience and potential for future growth in a rapidly changing automotive landscape. The steps taken in both traditional and electric vehicle markets, along with autonomous technology development, are positioning GM for continued success.
This mixed approach highlights GM’s ability to innovate while navigating market changes, demonstrating a hopeful trajectory for the company as it works toward long-term goals.