General Motors has increased several financial targets for 2024 after exceeding Wall Street expectations in its second quarter results.
The Detroit-based automaker has raised its forecast for adjusted earnings this year to a range of $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share. However, the projection for net income attributable to shareholders has been slightly reduced by less than 1%, now estimated between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% rise from the previous year and surpassing the Wall Street expectation of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, outperforming analysts’ predictions of $2.71 per share and reflecting a 60% increase from 2023. The company’s net income saw a 14% rise to $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock rose nearly 5% in pre-market trading, with the share price increasing over 37% this year. On Monday, GM declared a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs. She announced plans to launch eight new or redesigned models in North America, encompassing compact, mid-size, and full-size categories. Barra emphasized that GM is ramping up production of the electric Chevrolet Equinox, stating that the company is eager about its electric vehicle (EV) developments but is committed to disciplined growth.
Earlier this month, Barra admitted that GM is unlikely to meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The company plans to be adaptable in production, building according to demand, although EV sales did see an increase last quarter.
In addition, Barra shared that Cruise, GM’s self-driving division, will discontinue its Origin vehicle, which had faced operational challenges following an incident last October. Instead, Cruise will concentrate on using the next-generation Chevrolet Bolt as it conducts testing in Texas and Arizona. GM has incurred a $600 million charge linked to halting production of the Origin in Detroit.
During a conference call with analysts, Barra remarked that utilizing the Bolt would alleviate any regulatory concerns regarding the design of the Origin, particularly its absence of a steering wheel. This transition is expected to reduce per unit costs and optimize resource allocation for GM.
“Our vision to transform mobility through autonomous technology remains intact, and with every mile traveled and every simulation, we move closer to achieving our goals, as Cruise is fundamentally an AI-first company,” Barra stated.
Furthermore, GM is working to restructure its joint venture in China with SAIC Motor, facing ongoing losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, resulting in the delivery of 26,000 vehicles—50% less than in the same period the previous year, as reported by Automotive News.