General Motors is increasing several of its financial targets for 2024 after surpassing Wall Street’s expectations for its second quarter results.
The Detroit-based automaker has adjusted its anticipated adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. It has also raised targets for operating cash flow and earnings per share, although it slightly decreased the 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 a more than 7% increase from the previous year and surpassing the $45 billion that analysts had anticipated, as per FactSet estimates. The company’s earnings per share were $3.06, exceeding the expected $2.71 and marking a 60% increase from the same quarter last year. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday, with its shares rising over 37% this year. After the market closed on Monday, GM announced a third-quarter cash dividend, which contributed to the stock’s uptick.
In a letter to shareholders, CEO Mary Barra highlighted the company’s success with its gas-powered trucks and SUVs and mentioned plans to launch eight new or redesigned models across various sizes in North America. She also discussed the scaling of production for the electric Chevrolet Equinox, affirming that GM is committed to disciplined volume growth despite their earlier optimism regarding electric vehicles (EVs). Barra acknowledged that GM would not meet its goal of producing 1 million EVs in North America by the end of 2025 due to a slow market but indicated that EV sales had increased last quarter.
Additionally, Barra revealed a significant change regarding Cruise, GM’s self-driving division. The company will abandon its Origin vehicle to concentrate on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge associated with ceasing the production of the Origin in Detroit. On a call with analysts, Barra expressed that utilizing the Bolt would mitigate regulatory concerns around the Origin’s unconventional design, such as its absence of a steering wheel. This shift is expected to reduce per-unit costs and allow GM to better allocate resources.
Barra stated, “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.”
Moreover, GM is working to restructure its joint venture with SAIC Motor in China amidst ongoing losses, reporting a $104 million loss for the second quarter. Production at SAIC-GM drastically decreased by 70% in June, resulting in the delivery of only 26,000 vehicles, which is a 50% drop from the previous year, according to Automotive News.