General Motors has announced revised financial targets for 2024 after exceeding Wall Street’s expectations for its second quarter results.
The automotive giant has increased its forecast for adjusted earnings this year to between $13 billion and $15 billion, up from previously projected figures of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, though it slightly reduced expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
The company’s revenue for the second quarter reached $47.9 billion, which marks more than a 7% increase from the same period last year, surpassing the $45 billion anticipated by analysts according to FactSet estimates. Earnings per share were reported at $3.06, exceeding expectations of $2.71 and representing a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock price surged nearly 5% in pre-market trading on Tuesday, with shares up more than 37% over the course of the year. GM also announced a third-quarter cash dividend after the market closed on Monday, which further bolstered its stock.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs and mentioned the rollout of eight new or redesigned models across compact, mid-size, and full-size categories in North America. She expressed enthusiasm for scaling production of the electric Chevrolet Equinox and reaffirmed GM’s commitment to disciplined growth in electric vehicle (EV) manufacturing.
However, Barra acknowledged earlier this month that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company plans to be flexible and “build to demand,” while it did report growth in EV sales during the last quarter.
Additionally, Barra announced a strategic shift for Cruise, GM’s autonomous vehicle unit, which will stop production of its Origin vehicle following a suspension of operations last October. Instead, Cruise will focus on testing the next-generation Chevrolet Bolt in Texas and Arizona. GM has taken a $600 million charge due to the cessation of Origin production in Detroit.
During a conference call with analysts, Barra commented that utilizing the Bolt would help address regulatory concerns that arose with the Origin’s unconventional design, such as its omission of a steering wheel. This change is expected to reduce unit costs and improve resource optimization.
Barra reiterated GM’s commitment to transforming mobility through autonomous technology, stating that every mile and simulation brings the company closer to its goals as Cruise emphasizes artificial intelligence in its operations.
The company is also working on restructuring its joint venture with SAIC Motor in China due to ongoing losses, which amounted to $104 million in the second quarter. In June, SAIC-GM cut production by 70% and delivered only 26,000 vehicles, a 50% decrease compared to the previous year, according to industry sources.