General Motors has increased several of its financial targets for 2024 following a strong second-quarter performance that surpassed Wall Street projections.
The Detroit-based automaker has revised its expected adjusted earnings for the year to be between $13 billion and $15 billion, a rise from the previous estimate of $12.5 billion to $14.5 billion. Additionally, the company has elevated its targets for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders has been slightly reduced by less than 1%, now estimating between $10 billion and $11.4 billion.
GM reported second-quarter revenue of $47.9 billion, reflecting a more than 7% increase compared to the same period last year and exceeding the $45 billion forecast by analysts, as per FactSet estimates. Earnings per share reached $3.06, surpassing the expected $2.71 and showing a 60% increase from 2023. Net income increased by 14%, totaling $2.9 billion compared to $2.5 billion in the prior year.
As a result of these positive results, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has risen over 37% throughout the year. Following the close of trading on Monday, GM announced a cash dividend for the third quarter, boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of GM’s gas-powered trucks and SUVs. She mentioned that the company is set to launch eight new or redesigned models in North America across different sizes. Barra also reaffirmed GM’s commitment to growth in electric vehicle production, particularly for the Chevrolet Equinox, despite earlier comments indicating that the company would not achieve its target of producing 1 million electric vehicles in North America by the end of 2025 due to market challenges. GM continues to adapt its strategy to “build to demand,” while EV sales saw an uptick in the last quarter.
Furthermore, Barra disclosed that Cruise, GM’s self-driving division, would discontinue its Origin vehicle model and shift focus to the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a pause in production of the Origin due to regulatory concerns and is expected to reduce costs and streamline resources.
“Our vision to transform mobility using autonomous technology remains steadfast, and every mile traveled and simulation brings us closer, as Cruise is an AI-first company,” Barra affirmed.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China after reporting a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, which is 50% lower than the previous year, according to Automotive News.