General Motors has announced an increase in several financial targets for 2024 after outperforming expectations during the second quarter. The automaker has revised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has elevated its projections for operating cash flow and earnings per share, while slightly adjusting net income expectations for shareholders down by less than 1%, setting it between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking an increase of over 7% compared to the same period last year and surpassing Wall Street’s forecast of $45 billion, according to FactSet estimates. The company’s earnings per share were recorded at $3.06, exceeding analysts’ expectations of $2.71 and reflecting a 60% rise from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock saw an increase of nearly 5% in pre-market trading on Tuesday. The stock has risen more than 37% this year. In addition, GM recently declared a third-quarter cash dividend, contributing to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, stating that GM is launching eight new or redesigned models across compact, mid-size, and full-size categories in North America. She also mentioned the ramp-up in production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in the electric vehicle market.
However, Barra admitted that GM is unlikely to meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The company plans to remain adaptable and produce according to demand, although EV sales saw an increase in the last quarter.
Additionally, Barra announced a strategic shift for Cruise, GM’s self-driving division, which has faced setbacks following an incident last October. Cruise will discontinue its Origin vehicle and instead focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a $600 million charge related to the halted production of the Origin in Detroit. Barra noted that using the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacks a steering wheel. This change is expected to reduce per unit costs and enhance resource optimization.
“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.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China as it continues to face losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70% and delivered 26,000 vehicles, reflecting a 50% decline compared to the previous year.