General Motors (GM) has announced an increase in its financial targets for 2024 after exceeding Wall Street’s expectations for its second-quarter performance. The Detroit-based automaker has raised 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 modified its projections for operating cash flow and earnings per share, although expectations for net income attributable to shareholders were slightly lowered by less than 1%, now estimated between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the previous year and surpassing Wall Street’s expectations of $45 billion, according to FactSet estimates. The company recorded earnings per share of $3.06, which exceeded analysts’ predictions of $2.71 and represented a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following this announcement, GM’s stock saw an almost 5% increase in pre-market trading, contributing to a more than 37% rise in stock value this year. GM also declared a third-quarter cash dividend after the market closure on Monday, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs, while also stating that the company is in the process of launching eight new or redesigned vehicle models across various categories in North America. Moreover, Barra emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox, stating that the company is excited about its electric vehicles (EVs) but remains committed to disciplined volume growth.
Earlier this month, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by 2025, citing a slowdown in the market. The company plans to remain flexible and build according to demand, although its EV sales showed growth in the last quarter.
Additionally, Barra announced changes for Cruise, GM’s autonomous vehicle unit, which had scaled back operations following a previous incident. Cruise will shift its focus away from its Origin vehicle, opting instead to utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to halting the production of the Origin in Detroit.
During a call with analysts, Barra indicated that using the Bolt will mitigate regulatory concerns about the Origin’s unconventional design, which lacks a steering wheel. This strategy is aimed at reducing unit costs and optimizing resources.
“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,” Barra stated.
GM is also working to restructure its joint venture with SAIC Motor in China, as the company continues to face losses, reporting a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70% and delivered 26,000 vehicles, representing a 50% decline compared to the previous year.