General Motors has revised its financial targets for 2024 after exceeding Wall Street expectations in the second quarter. The automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous forecast of $12.5 billion to $14.5 billion. It has also raised its forecasts for operating cash flow and earnings per share, although the expectation for net income attributable to shareholders was slightly lowered to between $10 billion and $11.4 billion.
In the second quarter, GM’s revenue reached $47.9 billion, more than a 7% increase from the previous year and surpassing Wall Street’s expectations of $45 billion as per FactSet estimates. Earnings per share were reported at $3.06, exceeding the anticipated $2.71 and showing a 60% increase over the previous year. Net income rose by 14%, totaling $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock saw an almost 5% increase in pre-market trading on Tuesday, marking a rise of more than 37% for the year. The company also declared a third-quarter cash dividend, contributing to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gasoline-powered trucks and SUVs, mentioning the upcoming launch of eight new or redesigned models in North America. Barra emphasized that GM is ramping up production of the electric Chevrolet Equinox, stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Earlier this month, Barra acknowledged that GM would not 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 remain flexible and “build to demand,” even as EV sales increased last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, will discontinue its Origin vehicle after scaling back operations following an incident last October. Instead, Cruise will shift its focus to using the next-generation Chevrolet Bolt for testing in Texas and Arizona, leading to a $600 million charge due to the suspension of Origin production in Detroit.
During an analyst call, Barra expressed confidence in the shift to the Bolt, stating it would resolve regulatory concerns regarding the Origin’s unconventional design, such as the absence of a steering wheel. This transition is expected to reduce costs and better allocate resources.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” Barra stated.
GM is also in the process of restructuring its joint venture in China with SAIC Motor, as it continues to experience losses, including a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, a drop of 50% year-over-year, according to reports.