General Motors has announced an increase in its financial targets for 2024 after surpassing Wall Street expectations in the second quarter.
The Detroit-based automaker has revised its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has improved its targets for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders was slightly decreased by less than 1%, now estimated between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, exceeding the anticipated $45 billion and marking an over 7% increase from the previous year, according to FactSet. Earnings per share reached $3.06, significantly higher than the expected $2.71, and reflecting a 60% increase compared to 2023. The company’s net income rose by 14% to $2.9 billion, up from $2.5 billion.
The stock of GM surged nearly 5% in pre-market trading on Tuesday and has seen an increase of more than 37% throughout the year. Following the close of trading on Monday, GM announced a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of their gas-powered trucks and SUVs. She also mentioned the introduction of eight new or redesigned models in North America. Barra emphasized GM’s commitment to growing production of the electric Chevrolet Equinox, stating that they are focused on disciplined volume growth despite earlier setbacks in their electric vehicle (EV) production goals.
Barra recently acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to market challenges. The company plans to be flexible and align production with demand, although EV sales did show growth last quarter.
Barra also discussed changes in GM’s self-driving unit, Cruise, which has decided to discontinue its Origin vehicle and pivot to using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This shift follows a $600 million charge resulting from halting Origin production.
During an analyst call, Barra reassured that using the Bolt would address regulatory concerns regarding the unique design of the Origin, including its absence of a steering wheel. This adjustment is expected to reduce costs and optimize resources for the company.
GM is also working on restructuring its joint venture in China with SAIC Motor as it deals with ongoing losses, reporting a $104 million loss in the second quarter. Production at SAIC-GM was significantly cut back by 70% in June, leading to the delivery of 26,000 vehicles, which is 50% lower than the previous year.