General Motors has increased its financial targets for 2024 following impressive second-quarter results that exceeded Wall Street’s expectations. The automaker has raised its projected adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has updated its forecasts for operating cash flow and earnings per share, though the expectations for net income attributable to shareholders have been slightly reduced by less than 1%, now expected to be between $10 billion and $11.4 billion.
In the second quarter, GM reported a revenue of $47.9 billion, marking a rise of over 7% from the prior year and surpassing Wall Street’s expectations of $45 billion. Earnings per share reached $3.06, exceeding the anticipated $2.71 and representing a significant 60% increase from 2023. The net income grew by 14% to $2.9 billion, up from $2.5 billion.
Following the earnings report, GM’s stock increased by nearly 5% in pre-market trading on Tuesday, and the stock has appreciated over 37% this year. Additionally, GM declared a third-quarter cash dividend after the trading session on Monday, which further bolstered investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of its gasoline-powered trucks and SUVs and mentioned the launch of eight new or redesigned models across various sizes in North America. Barra also affirmed that GM is ramping up production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth despite the excitement surrounding initial success in electric vehicles.
Earlier this month, Barra indicated that GM would not meet its ambitious goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company plans to adapt its strategy by “building to demand,” although it did experience growth in EV sales last quarter.
Furthermore, Barra announced changes to Cruise, GM’s self-driving unit, which will no longer pursue its Origin vehicle after having scaled back operations following an incident last October. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. The company also accounted for a $600 million charge related to the halt of Origin production in Detroit.
During a conference call with analysts, Barra stated that the use of the Bolt would address regulatory concerns regarding the Origin’s unique design, such as its absence of a steering wheel. This strategic shift is expected to reduce costs per unit and enhance resource optimization.
GM is also restructuring its joint venture with SAIC Motor in China, as the company continues to face financial losses, noting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is 50% less compared to the same period last year, according to reports.