General Motors has announced an increase in its financial targets for 2024 after exceeding Wall Street’s projections for its second-quarter performance.
The Detroit-based automotive giant has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous range of $12.5 billion to $14.5 billion. Additionally, GM has adjusted its targets for operating cash flow and earnings per share. The outlook for net income attributable to shareholders has been slightly reduced by less than 1%, now estimated between $10 billion and $11.4 billion.
In its second-quarter results, GM reported a revenue of $47.9 billion, marking a more than 7% increase compared to the same period last year and surpassing Wall Street’s expectations of $45 billion, according to FactSet data. The company’s earnings per share stood at $3.06, exceeding the analyst forecast of $2.71 and representing a 60% increase from 2023. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
Following the financial update, GM’s stock surged nearly 5% in pre-market trading on Tuesday, reflecting a year-to-date increase of over 37%. On the previous day, GM announced a cash dividend for the third quarter, contributing to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of its gasoline-powered trucks and SUVs, mentioning the company’s commitment to launching eight new or redesigned vehicle models across various segments in North America. Barra also indicated that GM is ramping up production of the electric Chevrolet Equinox, emphasizing a balanced approach to growth in electric vehicle (EV) production despite earlier comments suggesting that the company would not meet its goal of producing 1 million EVs in North America by the end of 2025 due to market conditions.
Furthermore, Barra revealed that Cruise, GM’s autonomous vehicle division, would abandon its Origin vehicle project, which had previously faced operational setbacks. Instead, Cruise will concentrate on testing next-generation Chevrolet Bolts in Texas and Arizona. GM took a $600 million charge related to the discontinuation of the Origin production in Detroit.
During a call with analysts, Barra stated that utilizing the Chevrolet Bolt would address regulatory concerns associated with the Origin’s unconventional design, which lacked a steering wheel. This shift is expected to reduce unit costs and enhance resource allocation for GM.
“Our vision to change mobility through autonomous technology remains intact, and each mile and simulation brings us closer to our goals as Cruise continues to operate as an AI-first company,” Barra declared.
Lastly, GM is working on restructuring its joint venture in China with SAIC Motor, as the company continues to experience financial losses, posting a $104 million loss for the second quarter. In June, SAIC-GM reduced its production by 70%, resulting in only 26,000 vehicle deliveries, which is a 50% decrease from the previous year, according to Automotive News.