General Motors has raised its financial targets for 2024 following an impressive performance in the second quarter that exceeded Wall Street expectations.
The Detroit-based automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, an improvement from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, while slightly lowering the forecast for net income attributable to shareholders by less than 1%, now expected to be between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase compared to the same period last year and surpassing the anticipated $45 billion, according to FactSet estimates. Earnings per share stood at $3.06, significantly higher than the $2.71 expected by analysts and 60% above the figures from 2023. Net income also saw a 14% increase to $2.9 billion, up from $2.5 billion.
Following these announcements, GM shares rose nearly 5% in pre-market trading and have surged over 37% this year. After closing Monday’s trading session, the company declared a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned the launch of eight new or redesigned models across different categories in North America. She also noted the ramp-up in production of the electric Chevrolet Equinox, emphasizing GM’s commitment to disciplined growth in its electric vehicle (EV) segment.
Despite the optimism, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company plans to be flexible in its production strategy, focusing on building vehicles according to demand, although EV sales experienced growth in the last quarter.
Additionally, Barra announced a strategic shift for Cruise, GM’s self-driving unit, which will discontinue its Origin vehicle and instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision followed a $600 million charge associated with the halted production of the Origin in Detroit. Barra stated that using the Bolt would address regulatory concerns about the Origin’s unconventional design and help reduce per-unit costs.
Furthermore, GM is working on restructuring its joint venture in China with SAIC Motor amid ongoing losses, having reported a $104 million loss in the second quarter. Recent data indicated that SAIC-GM cut production by 70%, delivering 26,000 vehicles, which is 50% fewer than the previous year.