General Motors has announced an increase in several financial targets for 2024, following a strong second quarter that exceeded Wall Street forecasts.
The Detroit-based automaker has updated its projected adjusted earnings for the year, raising it to between $13 billion and $15 billion, up from a previous range of $12.5 billion to $14.5 billion. Additionally, GM has adjusted its targets for operating cash flow and earnings per share, while expectations for net income attributable to shareholders were slightly lowered by less than 1%, now estimated to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a rise of over 7% from the previous year and surpassing Wall Street’s expected $45 billion according to FactSet estimates. The company’s earnings per share stood at $3.06, exceeding analyst predictions of $2.71, and reflecting a 60% increase compared to 2023. Net income also saw a 14% increase, rising to $2.9 billion from $2.5 billion.
Following these announcements, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has risen more than 37% so far this year. After market close on Monday, GM revealed a third-quarter cash dividend, further boosting the stock’s appeal.
In a letter to shareholders, CEO Mary Barra highlighted the success of its gasoline-powered trucks and SUVs. She noted that GM is set to introduce eight new or redesigned compact, mid-size, and full-size models in North America. Barra also confirmed that GM is ramping up production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined volume growth despite excitement over early EV successes.
Barra previously 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. The company plans to adapt by “building to demand,” although it experienced growth in EV sales last quarter.
Additionally, Barra announced that Cruise, GM’s autonomous vehicle division, will discontinue the Origin model, which had its operations curtailed following an incident last October. Cruise will instead focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. As a result, GM faced a $600 million charge due to the halted production of the Origin in Detroit.
During an analyst call, Barra stated that using the Bolt would help alleviate any regulatory concerns regarding the Origin’s unique design, such as its absence of a steering wheel. This pivot is expected to reduce per-unit costs and optimize resource allocation.
“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 remarked in her statement.
In related news, GM is also working to restructure its joint venture with SAIC Motor in China as it continues to experience financial losses. The company reported a $104 million loss for the second quarter. In June, SAIC-GM cut production by 70%, delivering 26,000 vehicles, which is 50% fewer than the prior year, according to Automotive News.