General Motors has elevated several of its financial targets for 2024 following a strong second quarter performance that exceeded Wall Street expectations. The Detroit-based automaker has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous forecast of $12.5 billion to $14.5 billion. Furthermore, GM has adjusted its targets for operating cash flow and earnings per share, while slightly lowering the expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, representing a more than 7% year-over-year increase and surpassing Wall Street’s forecast of $45 billion, according to FactSet. The earnings per share were clocked at $3.06, well above the $2.71 anticipated by analysts, and 60% higher than the same period in 2023. The net income saw a 14% rise, coming in at $2.9 billion, compared to $2.5 billion a year earlier.
Following these announcements, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has gained over 37% this year. Additionally, the company declared a third-quarter cash dividend, providing further support to its stock price.
In a correspondence to shareholders, CEO Mary Barra celebrated the achievements of its gas-powered trucks and SUVs and highlighted the impending launch of eight new or redesigned vehicle models across various sizes in North America. Barra emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox, stating that while there is excitement surrounding their electric vehicles (EVs) and early successes, the company is dedicated to prudent 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 recent market slowdown. The company plans to adapt its production strategy to align with demand, although EV sales did experience growth in the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving subsidiary, will be discontinuing its Origin vehicle, which faced operational challenges after an incident last October. Instead, Cruise will now concentrate on utilizing the next-generation Chevrolet Bolt for testing purposes in Texas and Arizona. GM incurred a $600 million expense related to the suspension of Origin production in Detroit.
In a call with analysts, Barra expressed that employing the Bolt would mitigate regulatory concerns associated with the Origin’s unconventional design, such as the absence of a steering wheel. This change is expected to reduce costs per unit and enhance resource optimization.
“Our vision to transform mobility using autonomous technology remains unchanged, and every mile traveled and every simulation brings us closer, as Cruise is fundamentally an AI-first company,” Barra stated.
Lastly, GM is working to reorganize its joint venture with SAIC Motor in China due to ongoing losses, reporting a $104 million loss in the second quarter. In June, production cuts by SAIC-GM reached 70%, leading to the delivery of 26,000 vehicles, a 50% decline compared to the previous year, according to Automotive News.