General Motors has raised several financial targets for 2024 following a strong performance that exceeded Wall Street’s expectations for its second quarter.
The automaker has increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from previous estimates of $12.5 billion to $14.5 billion. Additionally, it revised its goals for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
For the second quarter, GM reported revenue of $47.9 billion, reflecting an over 7% increase from the same period last year and surpassing analyst expectations of $45 billion, according to FactSet. Earnings per share reached $3.06, exceeding the anticipated $2.71 and marking a 60% increase compared to 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
In pre-market trading on Tuesday, GM’s stock surged nearly 5%. So far this year, the stock has risen more than 37%. The company also declared a third-quarter cash dividend following the close of trading on Monday, which contributed to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra emphasized the success of GM’s gas-powered trucks and SUVs. She mentioned the launch of eight new or redesigned models across compact, mid-size, and full-size categories in North America. Barra highlighted the ramped-up production of the electric Chevrolet Equinox and expressed the company’s commitment to disciplined growth in this area.
However, she acknowledged that GM would fall short of its goal to produce 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. The company plans to remain flexible and “build to demand,” although it did see an increase in EV sales last quarter.
Barra also revealed that Cruise, GM’s self-driving division, would discontinue its Origin vehicle following a production halt after an incident last October. Instead, Cruise will focus on testing the next-generation Chevrolet Bolt in Texas and Arizona. GM incurred a $600 million charge related to the cessation of the Origin’s production in Detroit.
During a conference call with analysts, Barra stated that utilizing the Bolt would address regulatory concerns associated with the Origin’s unique design, particularly its absence of a steering wheel. This shift is expected to reduce costs per unit and allow GM to utilize resources more efficiently.
“Our vision to transform mobility using autonomous technology remains unchanged,” Barra remarked. “Every mile traveled and every simulation brings us closer, as Cruise is an AI-driven company.”
Additionally, GM is working on restructuring its joint venture with SAIC Motor in China, amid continuing losses that included a reported $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is 50% fewer than the previous year, according to Automotive News.