General Motors is increasing several financial targets for 2024 after exceeding Wall Street projections for its second quarter results.
The Detroit-based automaker has raised its expected 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, it has adjusted its targets for operating cash flow and earnings per share. However, the expected net income attributable to shareholders has been slightly lowered to between $10 billion and $11.4 billion, a decrease of less than 1%.
In terms of revenue, GM reported $47.9 billion for the second quarter, marking a more than 7% increase compared to the same period last year, and exceeding Wall Street’s forecast of $45 billion. Earnings per share reached $3.06, surpassing analysts’ expectations of $2.71 and representing a 60% increase from 2023. The net income rose by 14% to $2.9 billion, compared to $2.5 billion in the prior year.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading, with the shares having increased over 37% this year. On Monday, after the market closed, GM declared a cash dividend for the third quarter, contributing to the stock’s uptick.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of its gas-powered trucks and SUVs, and mentioned that the company is launching eight new or redesigned models across compact, mid-size, and full-size segments in North America. Barra affirmed GM’s commitment to scaling up production of the electric Chevrolet Equinox, emphasizing a disciplined approach to growth in electric vehicle (EV) sales.
Earlier in the month, Barra indicated that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown but noted that EV sales had still increased in the previous quarter.
Additionally, Barra announced that Cruise, GM’s autonomous driving unit, will abandon its Origin vehicle following a setback in operations last October, instead focusing on the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the suspension of Origin production in Detroit.
During an analyst call, Barra indicated that utilizing the Bolt could help address regulatory concerns regarding the Origin’s unconventional design, which lacks a steering wheel. This pivot is expected to reduce costs and enable GM to allocate resources more effectively.
“Our vision for revolutionizing mobility through autonomous technology remains firm, and each mile traveled, along with each simulation, brings us closer, as Cruise is an AI-first company,” Barra stated.
In addition to these developments, GM is working to restructure its joint venture with SAIC Motor in China, which has been experiencing losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, leading to the delivery of only 26,000 vehicles, which is a 50% drop compared to the previous year.