General Motors has announced an increase in its financial targets for 2024 after exceeding Wall Street’s expectations in its second-quarter results. The automaker has revised its expected adjusted earnings for the year, now forecasting between $13 billion and $15 billion, an increase from a prior estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, although the anticipated net income attributable to shareholders has been slightly adjusted downward to between $10 billion and $11.4 billion.
During the second quarter, GM reported revenues of $47.9 billion, reflecting a more than 7% increase year-over-year and surpassing Wall Street’s expectation of $45 billion, as per FactSet estimates. Earnings per share reached $3.06, exceeding the $2.71 forecast by analysts and representing a 60% increase from the previous year. Net income rose 14% to $2.9 billion, compared to $2.5 billion in the same period last year.
As a result of these positive financial indicators, GM’s stock surged nearly 5% in pre-market trading, with shares up over 37% for the year. The company has also declared a cash dividend for the third quarter, adding to the stock’s appeal.
In a letter to shareholders, CEO Mary Barra highlighted the company’s success in the gas-powered truck and SUV market and announced plans to launch eight new or redesigned models across various sizes in North America. While GM is scaling up production of the electric Chevrolet Equinox, Barra acknowledged a slowdown in the electric vehicle (EV) market and indicated the company might not achieve its goal of producing 1 million EVs in North America by the end of 2025. However, she emphasized a flexible manufacturing approach, indicating growth in EV sales last quarter.
Furthermore, Barra announced changes within GM’s self-driving unit, Cruise, which has decided to discontinue its Origin vehicle following a setback in operations last October. Instead, the unit will concentrate on testing the next-generation Chevrolet Bolt in Texas and Arizona, a move expected to ease regulatory concerns and reduce costs.
On the international front, GM is restructuring its joint venture in China with SAIC Motor, facing challenges that led to a $104 million loss in the second quarter. Production in China saw a 70% cut, with vehicle deliveries dropping significantly compared to the prior year.
This positive trajectory for GM, characterized by rising earnings and an optimistic outlook on new vehicle models, showcases the company’s resilience and adaptability in an evolving automotive market. The continuation of advancements in both conventional and electric vehicle sectors points towards a hopeful future for the automaker as it navigates challenges while focusing on innovation and customer demand.
Summary: General Motors has raised its financial targets for 2024 following strong second-quarter performance and increased revenue. While navigating challenges in the electric vehicle sector and a restructuring effort in China, GM remains optimistic with plans for new vehicle launches and production adjustments.