General Motors has adjusted its financial targets for 2024 following a better-than-expected performance in the second quarter, which surpassed Wall Street predictions.
The automaker increased its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. It also raised projections for operating cash flow and earnings per share, while slightly lowering expectations for net income attributed to shareholders to between $10 billion and $11.4 billion.
In its second-quarter report, GM recorded revenue of $47.9 billion, reflecting a more than 7% increase from the previous year and exceeding Wall Street’s expected $45 billion, according to FactSet. Earnings per share were reported at $3.06, surpassing analysts’ estimates of $2.71 and showing a 60% improvement compared to 2023. Net income rose 14%, reaching $2.9 billion, up from $2.5 billion.
Following the news, GM’s stock rose nearly 5% in pre-market trading and has seen an increase of over 37% this year. The company also declared a third-quarter cash dividend, which contributed to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and announced plans to launch eight new or redesigned vehicle models in North America. She emphasized the scaling of production for the electric Chevrolet Equinox, expressing excitement about their electric vehicle (EV) advancements while maintaining a commitment to disciplined growth.
However, 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 be adaptable and “build to demand,” even though EV sales saw growth in the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division that had to pause its operations after an incident last October, would abandon its Origin vehicle. Instead, Cruise will concentrate on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM took a $600 million charge related to the cessation of Origin production in Detroit.
During a call with analysts, Barra explained that using the Bolt addresses regulatory concerns regarding the unique design of the Origin, which does not feature a steering wheel. This shift is expected to reduce unit costs and optimize resources.
Barra reiterated GM’s commitment to transforming mobility through autonomous technology, stating, “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.”
Furthermore, GM is restructuring its joint venture in China with SAIC Motor due to ongoing losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is 50% lower than the same period last year, according to Automotive News.