General Motors has increased several financial targets for 2024 after exceeding Wall Street’s expectations in its second quarter results.
The Detroit-based automaker now projects adjusted earnings for the year to be between $13 billion and $15 billion, an increase 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 reducing its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenues of $47.9 billion, exceeding the expected $45 billion and representing a more than 7% increase year-over-year. Earnings per share reached $3.06, surpassing analysts’ predictions of $2.71 and showing a 60% rise from 2023. Net income climbed 14% to $2.9 billion, up from $2.5 billion the previous year.
Following the announcement, GM’s stock rose almost 5% in pre-market trading and has increased over 37% this year. After market closure on Monday, GM declared a cash dividend for the third quarter to further enhance stock performance.
In a shareholder letter, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs. She disclosed plans to launch eight new or redesigned models across various categories in North America. She also mentioned the scaling production of the electric Chevrolet Equinox and emphasized the company’s commitment to disciplined growth in the electric vehicle (EV) sector.
However, Barra noted that GM will not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The company is adapting by focusing on building vehicles according to demand, though its EV sales did witness growth last quarter.
Additionally, Barra announced changes in the operations of Cruise, GM’s self-driving unit, which previously had to curtail operations after an incident last October. Cruise will be transitioning away from its Origin vehicle and instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the discontinuation of the Origin vehicle’s production in Detroit.
During a call with analysts, Barra stated that using the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacks a steering wheel. This decision is also intended to reduce per-unit costs and optimize resources.
Barra reaffirmed GM’s vision to innovate mobility through autonomous technology, stating that every mile and simulation brings the company closer to its goals. Lastly, GM is working to restructure its joint venture with SAIC Motor in China, as it faces challenges and losses; the company reported a $104 million loss in the second quarter, with SAIC-GM significantly reducing production by 70% compared to the previous year.