General Motors has announced an increase in several financial targets for 2024 after exceeding Wall Street’s expectations in its second quarter earnings. The automaker has raised its adjusted earnings forecast for the year to between $13 billion and $15 billion, compared to previous expectations of $12.5 billion to $14.5 billion. Additionally, GM has updated its targets for operating cash flow and earnings per share, while slightly reducing the anticipated net income for shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, which is over a 7% increase from the previous year and surpasses Wall Street’s predicted figure of $45 billion. The company’s earnings per share came in at $3.06, significantly higher than the anticipated $2.71 and a 60% increase from the same period in 2023. Net income rose 14% to reach $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock surged nearly 5% in pre-market trading, adding to an impressive rise of more than 37% in 2023. Shortly after the trading session ended on Monday, GM declared a cash dividend for the third quarter, contributing to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra emphasized the company’s strong performance with gas-powered trucks and SUVs while announcing the introduction of eight new or redesigned models across various segments in North America. She also highlighted the ramp-up in production of the electric Chevrolet Equinox, affirming that while GM is enthusiastic about its EVs and their early successes, it remains focused on disciplined growth.
Earlier this month, however, Barra acknowledged that the company is unlikely to meet its target of producing 1 million electric vehicles in North America by the end of 2025, citing a slowdown in the market. GM plans to adjust its production strategy based on demand, although it reported an increase in EV sales last quarter.
Additionally, Barra stated that Cruise, GM’s autonomous driving division, would discontinue its Origin vehicle following a pause in operations due to an incident last October. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM has incurred a $600 million charge associated with halting production of the Origin.
During a conference call with analysts, Barra indicated that the switch to the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. This adjustment is expected to reduce costs per unit and help GM better allocate resources.
“Our vision to transform mobility using autonomous technology remains intact, and every mile traveled, along with every simulation, brings us closer because Cruise is an AI-first company,” Barra stated.
Moreover, GM is looking to restructure its joint venture with SAIC Motor in China as it continues to face losses, with the company reporting a $104 million loss for the second quarter. In June, production at SAIC-GM was reduced by 70%, resulting in 26,000 vehicles delivered, which is 50% less than the same time last year, according to Automotive News.