General Motors has announced an increase in several financial targets for 2024 following its strong performance in the second quarter, surpassing Wall Street’s expectations.
The automaker raised its projected adjusted earnings for the year to between $13 billion and $15 billion, up from a previous forecast of $12.5 billion to $14.5 billion. It also revised its projections for operating cash flow and earnings per share. However, the expectation for net income attributable to shareholders was slightly adjusted downwards 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, a more than 7% increase year-over-year, exceeding the $45 billion anticipated by analysts according to FactSet estimates. Earnings per share stood at $3.06, surpassing the expected $2.71 and reflecting a 60% rise compared to 2023. Net income showed a 14% increase, reaching $2.9 billion, compared to $2.5 billion a year earlier.
Following the announcement, GM’s stock rose nearly 5% in pre-market trading, and it has seen an overall increase of more than 37% this year. The company also declared a cash dividend for the third quarter, impacting stock performance positively.
In a shareholder letter, CEO Mary Barra praised the strong sales of gas-powered trucks and SUVs, mentioning the launch of eight new or redesigned vehicle models in North America. She emphasized GM’s commitment to disciplined growth in the electric vehicle sector, highlighting the increased production of the electric Chevrolet Equinox. However, she previously indicated that GM would likely not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market conditions, though EV sales did see growth last quarter.
Barra also revealed that Cruise, GM’s self-driving unit, would discontinue its Origin vehicle to focus on the next-generation Chevrolet Bolt during testing in Texas and Arizona. The decision follows a $600 million charge related to the halted production of the Origin.
During a call with analysts, Barra noted that utilizing the Bolt would address regulatory concerns associated with the unique design of the Origin, which lacks a steering wheel. This move is expected to reduce costs per unit and enhance resource optimization.
GM is also working on restructuring its joint venture in China with SAIC Motor as it grapples with ongoing losses, which amounted to $104 million in the second quarter. In June, SAIC-GM scaled back production by 70%, delivering 26,000 vehicles, a decline of 50% compared to the previous year.