General Motors is increasing several of its financial targets for 2024 after exceeding Wall Street’s expectations for its second-quarter performance.
The Detroit-based automaker has raised its anticipated adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous range of $12.5 billion to $14.5 billion. Additionally, GM has updated its forecasts for operating cash flow and earnings per share, while slightly reducing its expectations for net income attributable to shareholders by less than 1%, now projected between $10 billion and $11.4 billion.
During the second quarter, GM reported revenues of $47.9 billion, marking over a 7% rise compared to the same quarter last year and exceeding the $45 billion anticipated by analysts, according to estimates from FactSet. Earnings per share reached $3.06, surpassing the expected $2.71 and representing a 60% increase from 2023. The company’s net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock experienced an almost 5% boost in pre-market trading on Tuesday, with an overall increase of more than 37% this year. On Monday, after market close, the company also announced a cash dividend for the third quarter, providing an additional lift to its stock.
In a letter to shareholders, CEO Mary Barra emphasized the success of GM’s gas-powered trucks and SUVs and mentioned the launch of eight new or redesigned models in North America. She also highlighted the ramp-up of production for the electric Chevrolet Equinox, assuring shareholders of their commitment to disciplined growth in electric vehicle (EV) production despite earlier comments that GM would not meet its goal of producing 1 million EVs in North America by the end of 2025 due to market challenges. However, GM’s EV sales did see growth in the last quarter.
Moreover, Barra announced that Cruise, GM’s autonomous driving unit, would abandon its Origin vehicle project due to previous operational setbacks and will shift its focus to testing the next-generation Chevrolet Bolt in Texas and Arizona. GM has incurred a $600 million charge related to the suspension of Origin production in Detroit.
During a discussion with analysts, Barra noted that the decision to use the Bolt would alleviate regulatory concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. This transition is expected to reduce costs per unit and enable GM to better allocate its resources.
“Our vision to transform mobility using autonomous technology remains unchanged, and each driven mile and simulation brings us closer to our goals, as Cruise operates as an AI-first company,” Barra remarked.
Additionally, GM is working on restructuring its joint venture with SAIC Motor in China, as it continues to incur losses, including a $104 million loss reported for the second quarter. In June, SAIC-GM reduced its production by 70% and delivered 26,000 vehicles, a 50% decline compared to the previous year, according to reports.