General Motors has announced an increase in several financial targets for 2024 after exceeding Wall Street’s expectations for its second quarter. The Detroit-based automaker raised its projected adjusted earnings for the year to between $13 billion and $15 billion, an adjustment from a previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has elevated its targets for operating cash flow and earnings per share, while expectations for net income attributable to shareholders have been slightly decreased to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% year-over-year increase and surpassing the Wall Street estimate of $45 billion, according to FactSet. Earnings per share reached $3.06, exceeding analysts’ expectations of $2.71 and marking a 60% increase from the previous year. The company’s net income rose 14% to $2.9 billion, compared to $2.5 billion a year earlier.
As a result of this strong performance, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has increased over 37% throughout the year. Following the close of trading on Monday, GM announced a cash dividend for the third quarter, which positively impacted the stock price.
In a letter to shareholders, CEO Mary Barra emphasized the success of GM’s gas-powered trucks and SUVs, mentioning the launch of eight new or redesigned models in North America. Barra also discussed the ramp-up of production for the electric Chevrolet Equinox, reaffirming the company’s commitment to “disciplined volume growth” despite earlier statements indicating a likely failure to reach the goal of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns.
Barra also revealed a strategic shift for Cruise, GM’s self-driving division, which had previously scaled back operations after an incident last October. The company has decided to move away from the Origin vehicle and will instead utilize the next-generation Chevrolet Bolt as it tests its autonomous vehicles in Texas and Arizona. Consequently, GM incurred a $600 million charge associated with halting the Origin’s production in Detroit.
In a discussion with analysts, Barra noted that transitioning to the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. This shift will also help reduce costs per unit and optimize resource allocation.
Finally, GM is working to restructure its joint venture in China with SAIC Motor, as it continues to face financial losses. The company reported a $104 million loss for the second quarter, with SAIC-GM reducing production by 70% in June, resulting in deliveries of only 26,000 vehicles, a 50% decline from the previous year.