General Motors isIncreasing its financial targets for 2024 following a strong performance that exceeded Wall Street’s expectations in the second quarter.
The company revised its expected adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. It also raised its targets for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders was adjusted slightly downward by less than 1%, now set between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, a more than 7% increase compared to the same period last year, surpassing the Wall Street expectation of $45 billion based on FactSet estimates. Earnings per share for the quarter stood at $3.06, exceeding the analyst prediction of $2.71 per share, and reflecting a 60% increase from 2023. Net income rose 14% to $2.9 billion, compared to $2.5 billion a year earlier.
Following this news, GM’s stock surged nearly 5% in pre-market trading on Tuesday, contributing to a more than 37% increase in the stock’s value this year. Additionally, after the market closed on Monday, GM announced a third-quarter cash dividend, which further heightened stock enthusiasm.
In a letter to shareholders, CEO Mary Barra emphasized the success of its gasoline-powered trucks and SUVs and mentioned the company’s plans to introduce eight new or redesigned models across different sizes in North America. She also stated that GM is ramping up production of the electric Chevrolet Equinox, highlighting a commitment to disciplined volume growth despite earlier remarks indicating the company would not meet its objective of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. Nevertheless, EV sales did see growth last quarter.
Barra also revealed that Cruise, GM’s self-driving division, which had to pause operations following an incident last October, will abandon its Origin vehicle project. Instead, Cruise will concentrate on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM took a $600 million charge related to the production halt of the Origin in Detroit.
During an analyst call, Barra explained that utilizing the Bolt would alleviate regulatory concerns surrounding the unique design of the Origin, such as its absence of a steering wheel. She added that this change would decrease per-unit costs and help optimize GM’s resources.
“Our vision to transform mobility through autonomous technology remains unchanged, and with every mile traveled and every simulation conducted, we are getting closer, as Cruise is an AI-first company,” Barra stated.
Additionally, GM is working on restructuring its joint venture with SAIC Motor in China as it continues to face losses; the company reported a $104 million loss for the second quarter. In June, production at SAIC-GM was reduced by 70%, resulting in the delivery of 26,000 vehicles, which is 50% fewer than the previous year, according to reports.