General Motors has announced an increase in several financial targets for 2024 following a strong performance that exceeded Wall Street expectations in the second quarter.
The Detroit-based automaker has raised its forecast for adjusted earnings this year to a range of $13 billion to $15 billion, compared to the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has updated its expectations for operating cash flow and earnings per share, while slightly lowering the forecast for net income attributable to shareholders by less than 1%, now projected to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking more than a 7% increase from the same period last year, and surpassing Wall Street’s expectation of $45 billion. Earnings per share were reported at $3.06, which is higher than the anticipated $2.71 and reflects a 60% increase over 2023. The company also saw a 14% rise in net income, reaching $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock rose nearly 5% in pre-market trading and has increased by over 37% this year. The company also declared a cash dividend for the third quarter on Monday, further bolstering the stock’s value.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of GM’s gas-powered trucks and SUVs, while mentioning the ongoing launch of eight new or redesigned models across various sizes in North America. She also pointed out the ramp-up in production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in the EV sector, despite earlier comments indicating that GM will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown.
Furthermore, Barra announced that GM’s self-driving subsidiary, Cruise, will be abandoning its Origin vehicle model, opting instead to focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. This shift follows a significant $600 million charge related to the discontinuation of the Origin’s production in Detroit.
During a discussion with analysts, Barra noted that using the Bolt should address regulators’ concerns regarding the Origin’s unique design, like its absence of a steering wheel, while also reducing costs and optimizing resources. She reiterated GM’s commitment to transforming mobility through autonomous technology, stating that each test and simulation brings the company closer to that vision.
Lastly, GM is working to restructure its joint venture with SAIC Motor in China as it faces ongoing losses, reporting a $104 million loss for the second quarter alone. In June, SAIC-GM slashed production by 70%, delivering only 26,000 vehicles, which is a 50% decline from a year earlier.