General Motors has announced an increase in its financial targets for 2024, following a strong performance that exceeded Wall Street’s expectations for the second quarter. The automaker has revised its forecast for adjusted earnings to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion, and has also raised its targets for operating cash flow and earnings per share. However, the expected net income for shareholders has been slightly reduced, now projected between $10 billion and $11.4 billion.
In terms of revenue, GM reported $47.9 billion for the second quarter, marking over a 7% increase compared to the same period last year and surpassing the $45 billion anticipated by analysts, according to FactSet. The company’s earnings per share reached $3.06, exceeding the expected $2.71 and representing a 60% increase from 2023. Net income rose by 14%, reaching $2.9 billion, compared to $2.5 billion in the previous year.
As a result of the favorable earnings report, GM’s stock rose nearly 5% in pre-market trading on Tuesday, with the share value up more than 37% year-to-date. Additionally, GM declared a third-quarter cash dividend after the market closed on Monday, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra praised the performance of the company’s gas-powered trucks and SUVs, while also highlighting the launch of eight new or redesigned compact, mid-size, and full-size models in North America. Barra mentioned the company’s commitment to disciplined growth as it scales production of the electric Chevrolet Equinox. However, she acknowledged earlier this month that GM is unlikely to meet its goal of producing 1 million electric vehicles in North America by the end of 2025, citing a slowdown in the market. Despite this, GM’s electric vehicle sales did increase in the last quarter.
Barra also revealed plans regarding the company’s self-driving unit, Cruise, which had to scale back operations after a previous incident. Cruise will now focus on utilizing the next-generation Chevrolet Bolt instead of the planned Origin vehicle, which has been scrapped. GM incurred a $600 million charge linked to the suspension of Origin production in Detroit.
In addressing analysts, Barra noted that switching to the Bolt would help alleviate regulatory concerns associated with the unique design of the Origin, such as its absence of a steering wheel. This adjustment is expected to reduce costs per unit and allow GM to better allocate resources.
Furthermore, GM is working to restructure its joint venture with SAIC Motor in China, amid ongoing losses that included a $104 million deficit for the second quarter. In June, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, which represents a 50% decline from the previous year.