General Motors has raised its financial targets for 2024 following significant second-quarter results that exceeded Wall Street predictions.
The Detroit-based automaker has adjusted its anticipated adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. It has also raised its expectations for operating cash flow and earnings per share. However, the outlook for net income attributable to shareholders has been slightly lowered by less than 1%, now projected to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase from the same period last year, and surpassing the $45 billion anticipated by analysts, as per FactSet estimates. Earnings per share reached $3.06, exceeding projections of $2.71 and representing a 60% increase from 2023. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
GM’s stock saw a nearly 5% rise in pre-market trading on Tuesday and has increased more than 37% this year. Following the close of trading on Monday, GM announced a third-quarter cash dividend which contributed to the stock’s boost.
CEO Mary Barra highlighted in a letter to shareholders the success of GM’s gas-powered trucks and SUVs, mentioning the launch of eight new or redesigned models across compact, mid-size, and full-size categories in North America. She also indicated that the company is ramping up production of the electric Chevrolet Equinox, stating that while the company is excited about its electric vehicles, it remains committed to disciplined growth in volume.
Earlier this month, Barra acknowledged that GM will not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company has pledged to remain flexible and “build to demand,” although EV sales did see growth last quarter.
In addition, Barra announced that Cruise, GM’s autonomous vehicle unit, will discontinue its Origin vehicle after it had to scale back operations following an incident last October. Instead, Cruise will utilize the next-generation Chevrolet Bolt as it tests vehicles in Texas and Arizona. GM incurred a $600 million charge related to the halt in production of the Origin.
During an analyst call, Barra mentioned that using the Bolt would help alleviate regulatory concerns associated with the Origin’s distinct design, such as its lack of a steering wheel. This change is expected to reduce per unit costs and optimize resources.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, stating, “Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company.”
Moreover, GM is working to restructure its joint venture with SAIC Motor in China, continuing to face losses in the region, including a $104 million loss for the second quarter. In June, production was cut by 70% at SAIC-GM, leading to 26,000 vehicles delivered, which is 50% less than the prior year, according to Automotive News.