General Motors has announced an increase in several financial targets for 2024 after exceeding Wall Street expectations for its second-quarter performance.
The Detroit-based automaker has adjusted its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous range of $12.5 billion to $14.5 billion. Additionally, GM has raised its projections for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, representing more than a 7% increase compared to the same period last year and surpassing the $45 billion anticipated by analysts according to FactSet estimates. Earnings per share were reported at $3.06, exceeding the expected $2.71 and reflecting a 60% increase over 2023. The company’s net income rose by 14% to reach $2.9 billion, up from $2.5 billion.
Following this report, GM’s stock rose nearly 5% in pre-market trading and has increased by over 37% throughout the year. The company also declared a third-quarter cash dividend after the market closed on Monday, which positively impacted its stock price.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of the company’s gas-powered trucks and SUVs and mentioned that GM is launching eight new or redesigned models in North America. She noted that the production of the electric Chevrolet Equinox is scaling up, emphasizing a commitment to disciplined volume growth despite earlier statements indicating that GM might not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market challenges.
Barra also announced that Cruise, GM’s autonomous driving unit, will discontinue its Origin vehicle, opting instead to utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. The shift comes after Cruise faced setbacks in its operations due to a prior incident. GM has incurred a $600 million charge related to the pause in Origin production.
In discussions with analysts, Barra reassured that the decision to use the Bolt would address regulatory concerns regarding the unique design of the Origin, which notably lacks a steering wheel. Furthermore, this adjustment is expected to reduce costs per unit and enable better resource optimization.
Despite these developments, GM continues to restructure its joint venture with SAIC Motor in China amid ongoing financial losses, reporting a loss of $104 million in the second quarter. Production cuts of 70% in June led to 26,000 vehicle deliveries, marking a 50% decrease compared to the previous year.