General Motors has raised several financial targets for 2024 following strong performance in the second quarter that exceeded Wall Street’s expectations.
The Detroit-based automaker has adjusted its projected adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has upgraded its forecasts 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.
For the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% rise from the previous year and surpassing the anticipated $45 billion, as per FactSet estimates. The earnings per share were recorded at $3.06, outdoing the $2.71 expected by analysts and representing a 60% increase compared to 2023. Net income increased by 14%, reaching $2.9 billion, compared to $2.5 billion in the prior year.
GM’s stock surged nearly 5% in pre-market trading on Tuesday, reflecting a year-to-date increase of over 37%. Following the close of trading on Monday, GM also declared a cash dividend for the third quarter, further boosting its stock.
In a letter addressed to shareholders, CEO Mary Barra emphasized the success of the company’s gas-powered trucks and SUVs, highlighting that GM is launching eight new or redesigned models across compact, mid-size, and full-size categories in North America. Additionally, she mentioned that GM is ramping up production of the electric Chevrolet Equinox and reaffirmed the company’s commitment to disciplined volume growth despite recent challenges.
Earlier this month, Barra acknowledged that GM would not meet its target of manufacturing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company aims to remain flexible and responsive to demand, although EV sales did see an uptick in the last quarter.
Furthermore, Barra revealed that Cruise, GM’s self-driving division, will discontinue its Origin vehicle following operational setbacks last October. Instead, Cruise will focus on using the next-generation Chevrolet Bolt for testing vehicles in Texas and Arizona. GM incurred a $600 million charge related to the suspension of Origin production in Detroit.
During a call with analysts, Barra explained that utilizing the Bolt will address regulatory concerns associated with the Origin’s unique design, such as its absence of a steering wheel. This shift is expected to reduce costs per unit and help GM better allocate its resources.
Barra reiterated GM’s commitment to transforming mobility through autonomous technology, stating that each mile traveled and simulation brings Cruise closer to achieving its goals. Additionally, GM is looking to restructure its joint venture with SAIC Motor in China as it continues to experience financial losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced its production by 70%, delivering 26,000 vehicles, which is 50% less than the same period last year.