General Motors has announced it is raising several financial targets for 2024 following a strong performance that exceeded Wall Street expectations in the second quarter.
The Detroit-based automaker has increased its adjusted earnings forecast 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. Additionally, GM has raised its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In its second-quarter report, GM revealed a revenue of $47.9 billion, marking over a 7% increase from the same period last year and surpassing the $45 billion anticipated by analysts. Earnings per share were reported at $3.06, exceeding the expected $2.71 per share and representing a 60% increase compared to 2023. Net income experienced a 14% rise, reaching $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading on Tuesday, bringing the year-to-date increase to over 37%. The company declared a third-quarter cash dividend after Monday’s trading closed, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, mentioning the company’s plans to launch eight new or redesigned models across compact, mid-size, and full-size categories in North America. She emphasized GM’s commitment to disciplined growth in the production of the electric Chevrolet Equinox, despite acknowledging earlier this month that the company would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. However, EV sales did see growth in the last quarter.
Barra also announced that Cruise, GM’s autonomous driving unit that had previously scaled back operations following an incident last October, will be discontinuing its Origin vehicle model to focus on testing the next-generation Chevrolet Bolt in Texas and Arizona. The shift comes after GM incurred a $600 million charge linked to the halted production of the Origin in Detroit. Barra noted that utilizing the Bolt would address regulatory concerns regarding the Origin’s unconventional design and would reduce costs per unit, allowing GM to optimize its resources.
“Our vision to transform mobility using autonomous technology remains unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” Barra stated.
Furthermore, GM is looking to restructure its joint venture with SAIC Motor in China, as the company continues to face losses, which hit $104 million in the second quarter. Production cuts of 70% in June resulted in the delivery of only 26,000 vehicles, down 50% from the previous year.