General Motors has raised several financial targets for 2024 after exceeding Wall Street’s expectations in its second-quarter results.
The Detroit automaker increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM raised its targets for operating cash flow and earnings per share while slightly decreasing expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, representing a more than 7% increase from the same period last year and surpassing the $45 billion anticipated by Wall Street analysts. Earnings per share stood at $3.06, exceeding the expected $2.71 and demonstrating a 60% increase compared to the previous year. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
As a result, GM’s stock rose nearly 5% in pre-market trading, marking a more than 37% increase for the year. Following the market close on Monday, GM announced a cash dividend for the third quarter, contributing to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of its gasoline-powered trucks and SUVs. She indicated that GM is in the process of launching eight new or redesigned models across compact, mid-size, and full-size segments in North America. Barra also stated that GM is increasing production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined volume growth despite recent success with electric vehicles (EVs).
Earlier this month, she acknowledged that GM would miss its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown, but reaffirmed the company’s strategy to adapt production based on demand, noting that EV sales had grown in the last quarter.
Barra also announced that Cruise, GM’s autonomous vehicle division, will discontinue its Origin vehicle following operational setbacks from last October. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. The company incurred a $600 million charge related to the halted production of the Origin in Detroit, which had drawn regulatory concerns due to its unique design lacking a steering wheel. According to Barra, using the Bolt will alleviate these concerns and is expected to reduce costs per unit while optimizing 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.
Furthermore, GM is restructuring its joint venture with SAIC Motor in China due to ongoing financial losses. The company reported a $104 million loss for the second quarter, while in June, production at SAIC-GM was cut by 70%, resulting in only 26,000 vehicle deliveries, a decrease of 50% compared to the previous year.