General Motors has increased several financial targets for 2024 following impressive second-quarter results that exceeded Wall Street predictions. The Detroit-based automaker has adjusted its expected adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion, while also raising its targets for operating cash flow and earnings per share. However, the projected net income attributable to shareholders was slightly reduced by less than 1%, now expected to be between $10 billion and $11.4 billion.
During the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase compared to the same period last year and surpassing the Wall Street forecast of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, significantly higher than the anticipated $2.71, representing a 60% rise from 2023. The company’s net income escalated by 14% to $2.9 billion, up from $2.5 billion in the previous year.
As a result of the positive financial news, GM’s stock rose nearly 5% in pre-market trading, having increased over 37% this year. The company also declared a third-quarter cash dividend after market close on Monday, contributing to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs, and revealed plans to launch eight new or redesigned models across various size categories in North America. Barra emphasized the scaling of production for the electric Chevrolet Equinox, expressing excitement about the company’s electric vehicle (EV) initiatives while stressing a commitment to disciplined growth.
Earlier this month, Barra acknowledged that GM will fall short of its goal of producing 1 million EVs in North America by the end of 2025, attributing this shortfall to a slowdown in the market. The company plans to maintain flexibility and adapt production according to demand, though it reported growth in EV sales in the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, would discontinue development of its Origin vehicle, focusing instead on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the suspension of the Origin’s production in Detroit.
During a call with analysts, Barra explained that transitioning to the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as the absence of a steering wheel, while also reducing 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.
Lastly, GM is working to restructure its joint venture with SAIC Motor in China to address ongoing losses, having reported a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, a 50% decrease from the previous year.