General Motors has increased several financial targets for 2024 after exceeding Wall Street’s expectations in its second quarter results.
The Detroit-based automaker has raised its forecast for adjusted earnings for the year to between $13 billion and $15 billion, a jump from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has lifted its targets for operating cash flow and earnings per share. However, it slightly adjusted its expectations for net income attributable to shareholders downward by less than 1%, now estimating between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase compared to the same period last year and surpassing Wall Street’s expectations of $45 billion, according to FactSet. Earnings per share reached $3.06, well above the anticipated $2.71 and a 60% increase compared to 2023. Net income also rose 14%, reaching $2.9 billion compared to $2.5 billion the previous year.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday, continuing a strong year where the stock has risen over 37%. The company also declared a third-quarter cash dividend after trading concluded on Monday, which positively impacted the stock price.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She mentioned that the automaker plans to launch eight new or redesigned models across various sizes in North America. Barra also reassured shareholders about GM’s electric vehicle strategy, particularly the ramp-up of production for the electric Chevrolet Equinox, stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Barra previously acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing the delay to a market slowdown. The company emphasized a flexible approach, pledging to “build to demand,” although it reported an increase in EV sales last quarter.
Additionally, Barra revealed that Cruise, GM’s self-driving unit, will discontinue its Origin vehicle, which had faced operational challenges following an incident in October. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million expense due to the halt in Origin production in Detroit.
During a call with analysts, Barra indicated that using the Bolt would address regulators’ concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel. This approach is expected to reduce unit costs and help GM optimize its 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.
GM is also working to restructure its joint venture with SAIC Motor in China, as the company faces losses, including a $104 million deficit for the second quarter. In June, SAIC-GM scaled back production by 70%, delivering only 26,000 vehicles, which represents a 50% decrease from the prior year, according to industry reports.