General Motors has raised multiple financial targets for 2024 after surpassing Wall Street’s projections for its second quarter. The Detroit-based automaker increased its adjusted earnings forecast for the year to between $13 billion and $15 billion, up from its previous estimate of $12.5 billion to $14.5 billion. Additionally, it has adjusted its predictions for operating cash flow and earnings per share, while expectations for net income attributable to shareholders were slightly reduced to a range of $10 billion to $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% rise compared to the previous year and exceeding Wall Street’s $45 billion forecast. Earnings per share reached $3.06, surpassing analysts’ expectations of $2.71 and marking a 60% increase from 2023. Net income was reported at $2.9 billion, a 14% increase from $2.5 billion.
Following these positive results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to an overall increase of more than 37% in stock price this year. After Monday’s market close, GM announced a third-quarter cash dividend that also boosted investor confidence.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, while announcing the launch of eight new or redesigned models in North America. She emphasized the company’s commitment to ramping up production of the electric Chevrolet Equinox, stating that while GM is excited about its electric vehicle (EV) lineup, it is dedicated to maintaining disciplined growth.
However, Barra noted earlier this month that GM would not achieve its target of producing 1 million electric vehicles in North America by the end of 2025 due to a downturn in the market. The company has expressed its intention to remain flexible and adjust production based on demand, although EV sales did see an increase last quarter.
Barra also announced that Cruise, GM’s self-driving unit, would discontinue its Origin vehicle following operational challenges faced last October, instead opting to utilize the next-generation Chevrolet Bolt during tests in Texas and Arizona. This decision came along with a $600 million charge linked to the halt in Origin production in Detroit.
In response to concerns from regulators regarding the unique design of the Origin, particularly its absence of a steering wheel, Barra stated that using the Bolt would mitigate these issues while also reducing costs per unit and optimizing resources.
GM is also working to restructure its joint venture in China with SAIC Motor as it faces ongoing losses, with a reported $104 million loss for the second quarter. Earlier in June, SAIC-GM had cut production by 70%, delivering 26,000 vehicles, which is half of what they managed the previous year.