General Motors has raised several financial targets for 2024 after exceeding Wall Street’s expectations in its second quarter results.
The Detroit-based automaker increased its forecast for adjusted earnings this year to between $13 billion and $15 billion, up from an initial range of $12.5 billion to $14.5 billion. Additionally, targets for operating cash flow and earnings per share were raised. However, the expectations for net income attributable to shareholders were slightly reduced by less than 1%, now projected to be between $10 billion and $11.4 billion.
GM’s revenue for the second quarter reached $47.9 billion, marking a more than 7% increase from the previous year and surpassing Wall Street’s estimated $45 billion, as per FactSet data. The earnings per share were reported at $3.06, exceeding the anticipated $2.71 and demonstrating a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
As a result of the strong financial performance, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has gained over 37% in value this year. Following the market close on Monday, the company announced a cash dividend for the third quarter, further enhancing stock performance.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gasoline-powered trucks and SUVs, mentioning the company’s efforts to launch eight new or redesigned models across different sizes in North America. Barra also emphasized the scaling production of the electric Chevrolet Equinox, expressing commitment to disciplined growth in electric vehicle output despite market challenges. Earlier this month, she 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.
Additionally, the CEO announced a strategic shift for Cruise, GM’s self-driving unit, which is discontinuing its Origin vehicle following a previous operational rollback after an incident last October. Instead, Cruise will focus on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the halt in Origin production in Detroit.
During an analyst call, Barra stated that utilizing the Bolt would address any regulatory concerns related to the Origin’s unconventional design, while also reducing costs and improving resource allocation.
“Our vision to transform mobility using autonomous technology remains intact, and every mile traveled and simulation brings us closer because Cruise is an AI-first company,” Barra asserted.
Furthermore, GM is restructuring its joint venture with SAIC Motor in China as it continues to face financial losses, reporting a $104 million loss for the second quarter. In June, production at SAIC-GM was slashed by 70%, resulting in the delivery of only 26,000 vehicles, a 50% decrease from the same period last year, according to industry sources.