General Motors has increased several financial targets for 2024 after exceeding Wall Street’s expectations in its second-quarter results.
The Detroit-based auto manufacturer raised its projected adjusted earnings for the year to a range of $13 billion to $15 billion, a revision from the previous estimate of $12.5 billion to $14.5 billion. Additionally, it has updated its outlook for operating cash flow and earnings per share. However, expectations for net income attributable to shareholders were slightly reduced by less than 1%, now estimated at between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking an increase of over 7% from the same period last year and exceeding Wall Street’s forecast of $45 billion, according to FactSet estimates. The company’s earnings per share were recorded at $3.06, surpassing analysts’ expectations of $2.71 and representing a 60% rise compared to 2023. Net income increased by 14% to $2.9 billion, a rise from $2.5 billion.
Following the release of these results, GM’s stock rose almost 5% in pre-market trading on Tuesday, and it has seen a year-to-date increase of more than 37%. After the market closed on Monday, GM announced a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of its gasoline-powered trucks and SUVs, noting the company is launching eight new or redesigned compact, mid-size, and full-size models in North America. Barra also emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox, stating that while the excitement for electric vehicles (EVs) is high, there remains a focus on disciplined volume growth.
Earlier this month, Barra acknowledged that GM will not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company has indicated a flexible approach to production based on demand, although it did see an increase in EV sales last quarter.
Barra also announced changes regarding Cruise, GM’s self-driving division, which had to retract its operations following an incident last October. Cruise will abandon its Origin vehicle in favor of utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the shutdown of Origin production in Detroit.
During an analyst call, Barra explained that the decision to use the Bolt will address regulatory concerns related to the Origin’s distinctive design, which lacks a steering wheel. This shift will also help reduce costs per unit and allow GM to better allocate resources.
“Our vision to transform mobility using autonomous technology remains steadfast, as every mile driven and each simulation brings us closer to our goals because Cruise is an AI-first company,” Barra stated.
Additionally, GM is working on restructuring its joint venture in China with SAIC Motor, which has been experiencing losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM reduced its production by 70%, delivering 26,000 vehicles—50% less than the previous year, according to Automotive News.