General Motors has increased its financial targets for 2024 following strong second-quarter performance that exceeded Wall Street’s expectations. The automaker has raised its projected adjusted earnings for the year to between $13 billion and $15 billion, up from a previous range of $12.5 billion to $14.5 billion. Additionally, expectations for operating cash flow and earnings per share have also been elevated, while the forecast for net income attributable to shareholders has been slightly lowered to between $10 billion and $11.4 billion, marking a decrease of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, reflecting an increase of more than 7% compared to the same period last year and surpassing the $45 billion anticipated by analysts. Earnings per share stood at $3.06, exceeding the expected $2.71 and representing a 60% rise from 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
Following this announcement, GM’s stock jumped nearly 5% in pre-market trading and has seen a year-to-date increase of over 37%. In addition, GM revealed a third-quarter cash dividend which further boosted its stock performance.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, mentioning plans to launch eight new or redesigned compact, mid-size, and full-size models in North America. She stated that GM is ramping up production of the electric Chevrolet Equinox and emphasized the company’s commitment to controlled growth in electric vehicle production, despite previously indicating that it would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025.
Barra also discussed changes to Cruise, GM’s self-driving division. After scaling back operations following an incident last October, Cruise will abandon plans for its Origin vehicle and will instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the halted production of the Origin.
Barra reassured analysts that the decision to use the Bolt addresses regulatory concerns about the Origin’s unconventional design, which lacks a steering wheel. This shift is expected to reduce costs per unit and optimize GM’s resources.
Additionally, GM is restructuring its joint venture with SAIC Motor in China, facing ongoing losses and reporting a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, a decline of 50% compared to the previous year.