General Motors has updated several financial targets for 2024 following stronger-than-expected results for its second quarter, surpassing Wall Street forecasts. The automaker now anticipates adjusted earnings to be between $13 billion and $15 billion, an increase from the previous projection of $12.5 billion to $14.5 billion. It also raised its forecasts for operating cash flow and earnings per share, though the net income estimate for shareholders was slightly reduced by less than 1%, projected at between $10 billion and $11.4 billion.
In its second quarter, GM reported revenues of $47.9 billion, marking over a 7% increase compared to the same period last year, and exceeding Wall Street’s expectation of $45 billion, as noted by FactSet estimates. The company’s earnings per share reached $3.06, outpacing analysts’ predictions of $2.71 per share and showing a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock surged nearly 5% in pre-market trading on Tuesday, with a rise of over 37% since the beginning of the year. Additionally, GM declared a cash dividend for the third quarter after market close on Monday, contributing to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra emphasized the strong performance of GM’s gas-powered trucks and SUVs and mentioned the company’s plans to launch eight new or redesigned vehicle models in North America. Barra indicated that GM is ramping up production of the electric Chevrolet Equinox and highlighted a commitment to disciplined vehicle growth despite earlier statements that the target of producing 1 million electric vehicles in North America by the end of 2025 may not be met due to market conditions.
Furthermore, Barra announced that Cruise, GM’s self-driving unit, will discontinue the Origin vehicle and shift focus to using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a prior incident that forced Cruise to scale back operations. The company incurred a $600 million charge tied to halting production of the Origin.
In a call with analysts, Barra stated that utilizing the Bolt would help address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. This pivot is expected to reduce costs and improve resource optimization.
Lastly, GM is working to restructure its joint venture with SAIC Motor in China amid ongoing losses, registering a $104 million loss for the second quarter. Production was cut by 70% at SAIC-GM in June, and the company delivered 26,000 vehicles, representing a 50% decline from the previous year, according to Automotive News.