General Motors has raised several financial targets for 2024 following strong performance that exceeded Wall Street’s forecasts for the second quarter.
The Detroit-based automaker announced it now anticipates adjusted earnings for the year to be between $13 billion and $15 billion, an increase from previous estimates of $12.5 billion to $14.5 billion. Additionally, GM raised its expectations for operating cash flow and earnings per share. However, it slightly reduced its forecast for net income attributable to shareholders to a range of $10 billion to $11.4 billion, down less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% increase from the previous year and surpassing Wall Street’s expectations of $45 billion. The company reported earnings per share of $3.06, exceeding the anticipated $2.71 per share and representing a 60% increase compared to 2023. Net income rose by 14%, totaling $2.9 billion, compared to $2.5 billion the previous year.
In pre-market trading on Tuesday, GM’s stock surged nearly 5%, continuing a strong upward trend that has seen shares rise over 37% this year. Following the market close on Monday, the automaker announced a cash dividend for the third quarter, further boosting its stock.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs while announcing plans to launch eight new or redesigned compact, mid-size, and full-size models in North America. She emphasized the company’s commitment to scaling production of the electric Chevrolet Equinox, stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a market slowdown. The company remains flexible and intends to “build to demand,” although its EV sales showed growth in the last quarter.
Additionally, Barra shared that Cruise, GM’s self-driving unit, will discontinue its Origin vehicle due to operational setbacks experienced last October. The focus will shift to using the next-generation Chevrolet Bolt for testing vehicles in Texas and Arizona. GM incurred a $600 million charge associated with halting production of the Origin in Detroit.
During a call with analysts, Barra mentioned that transitioning to the Bolt would address regulatory concerns regarding the Origin’s unique design, which did not include a steering wheel. This shift is expected to reduce per unit costs and optimize resources.
“Our vision to transform mobility using autonomous technology remains unchanged, and every mile traveled and every simulation brings us closer because Cruise is an AI-first company,” Barra stated.
Furthermore, GM is seeking to restructure its joint venture with SAIC Motor in China due to ongoing losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, half of the amount delivered one year earlier, according to reports.