General Motors has announced an increase in its financial targets for 2024, following strong second-quarter results that exceeded Wall Street expectations. The company has raised its projected 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. Operating cash flow and earnings per share targets have also been elevated, while net income expectations for shareholders have been slightly reduced by less than 1%, now forecasted between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the same period last year and surpassing Wall Street’s prediction of $45 billion, according to FactSet estimates. Earnings per share came in at $3.06, exceeding analysts’ expectations of $2.71 and showing a 60% increase compared to 2023. The company experienced a 14% growth in net income, rising to $2.9 billion from $2.5 billion.
Following these announcements, GM’s stock price rose nearly 5% in pre-market trading and has seen an increase of over 37% this year. The company also declared a cash dividend for the third quarter, which contributed to the stock’s positive performance.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, while noting that the company is launching eight new or redesigned vehicle models in North America. Barra mentioned that GM is ramping up production of the electric Chevrolet Equinox and emphasized the company’s commitment to responsible volume growth in the electric vehicle market.
However, Barra also acknowledged that GM will not reach its target of producing 1 million electric vehicles in North America by the end of 2025, citing a slowdown in the market. The company plans to adapt by building according to demand, though EV sales did increase in the last quarter.
Additionally, Barra announced that Cruise, GM’s autonomous driving division, will abandon its Origin vehicle project and instead concentrate on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a $600 million charge associated with discontinuing production of the Origin in Detroit.
During a call with analysts, Barra asserted that utilizing the Chevrolet Bolt would address regulatory concerns related to the Origin’s unconventional design, such as the absence of a steering wheel. This pivot is expected to reduce costs per unit and enhance resource optimization for GM.
The company is also working on restructuring its joint venture with SAIC Motor in China, as it faces continued losses, including a reported $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, which is 50% less than the previous year, according to industry reports.