General Motors is significantly boosting its financial targets for 2024 following impressive results in its second quarter that exceeded Wall Street expectations. The automaker has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, compared to the previous estimate of $12.5 billion to $14.5 billion. It has also increased its forecasts for operating cash flow and earnings per share, while slightly lowering the 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, marking an increase of over 7% from the previous year and surpassing Wall Street’s forecast of $45 billion. Earnings per share were reported at $3.06, exceeding the expected $2.71 per share and reflecting a 60% increase from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following this announcement, GM’s stock surged nearly 5% in pre-market trading on Tuesday, and it has risen more than 37% this year. The company also declared a third-quarter cash dividend, which contributed to the stock’s upward movement.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs while mentioning the upcoming launch of eight new or redesigned models in North America. Barra noted that the company is increasing production of the electric Chevrolet Equinox, expressing enthusiasm for their electric vehicle strategy but emphasizing the need for managed growth.
Despite optimism, Barra acknowledged that GM would not reach its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns. The company plans to remain flexible and “build to demand,” although it did see growth in electric vehicle sales last quarter.
Barra also addressed the status of Cruise, GM’s self-driving unit, which had to scale back its operations after an incident last October. The company announced it would abandon the Origin vehicle, opting instead to utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the halting of Origin production in Detroit.
During a call with analysts, Barra indicated that transitioning to the Bolt would alleviate regulatory concerns regarding the Origin’s unconventional design, such as its lack of a steering wheel. This shift is expected to lower per unit costs and help optimize resources for GM.
“Our vision to transform mobility using autonomous technology remains unchanged, and every mile traveled and every simulation brings us closer because Cruise is an AI-first company,” Barra stated.
Additionally, GM is working to restructure its joint venture in China with SAIC Motor amid ongoing losses, which included a $104 million loss for the second quarter. SAIC-GM reduced production by 70% in June, delivering only 26,000 vehicles, representing a 50% decline from the previous year.