General Motors has announced several financial targets for 2024 following a strong performance in the second quarter that exceeded Wall Street predictions. The automaker has elevated its adjusted earnings forecast to between $13 billion and $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion, and has also increased its targets for operating cash flow and earnings per share. However, the projection for net income attributable to shareholders has been slightly reduced, now anticipated to be between $10 billion and $11.4 billion.
In the second quarter, GM’s revenue reached $47.9 billion, marking an increase of over 7% compared to the same period last year and surpassing the $45 billion estimated by analysts. The company reported earnings per share of $3.06, exceeding the expected $2.71 per share and reflecting a 60% increase from 2023. Net income rose 14%, reaching $2.9 billion, up from $2.5 billion.
As a result of this positive news, GM’s stock rose nearly 5% in pre-market trading on Tuesday, and it has soared more than 37% since the beginning of the year. Additionally, GM announced a third-quarter cash dividend, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs and mentioned the launch of eight new or redesigned models in North America. She also addressed the production scale of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in electric vehicles (EVs). Despite earlier expectations, Barra indicated that GM would not reach its goal of producing 1 million EVs in North America by the end of 2025 due to a market slowdown, but noted that EV sales did see growth in the last quarter.
Moreover, Barra revealed that Cruise, GM’s self-driving division, plans to abandon the development of its Origin vehicle, which had been under scrutiny following a previous operational setback. Instead, Cruise will now utilize the next-generation Chevrolet Bolt for its testing phases in Texas and Arizona. GM has incurred a $600 million charge due to the decision to halt the Origin’s production in Detroit.
During an analyst call, Barra expressed confidence in Cruise’s mission to advance autonomous technology, stating that the experience gained from every test and simulation will drive progress for the AI-focused company.
Lastly, GM is reevaluating its joint venture in China with SAIC Motor, continuing to face financial challenges, including a $104 million loss for the second quarter. Reports indicate that SAIC-GM significantly reduced production by 70% in June, delivering only 26,000 vehicles, which is 50% lower than the previous year.