General Motors has increased its financial targets for 2024 following a strong second-quarter performance that exceeded Wall Street expectations.
The automaker has revised its projected adjusted earnings for the year to between $13 billion and $15 billion, raising it from a previous range of $12.5 billion to $14.5 billion. Additionally, GM has updated its targets for operating cash flow and earnings per share, although it slightly lowered its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
In the second quarter, GM reported revenues of $47.9 billion, which marks an increase of over 7% compared to the same period last year and surpasses the expected $45 billion, according to FactSet estimates. The company’s earnings per share reached $3.06, exceeding the analyst expectation of $2.71 and representing a 60% increase from 2023. Net income rose 14% to $2.9 billion, compared to $2.5 billion in the previous year.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading, contributing to a year-to-date gain of more than 37%. After market close on Monday, GM also declared a cash dividend for the third quarter, which further supported the stock’s performance.
In a letter to shareholders, GM CEO Mary Barra highlighted the success of the automaker’s gas-powered trucks and SUVs while announcing plans to launch eight new or redesigned vehicles across various sizes in North America. She emphasized the company’s commitment to increasing production of the electric Chevrolet Equinox, stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Earlier this month, Barra mentioned that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slow market. GM has indicated a flexible approach to production, aiming to “build to demand,” even as EV sales witnessed growth in the last quarter.
Furthermore, Barra revealed that Cruise, GM’s self-driving division, would abandon its Origin vehicle project, which had faced operational challenges after an incident last October. Instead, Cruise will concentrate on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM reported a $600 million charge associated with halting production of the Origin in Detroit.
During an analyst call, Barra stated that utilizing the Bolt would address regulatory concerns about the unique design of the Origin, which lacked a steering wheel. This decision is also aimed at reducing per unit costs and optimizing the company’s 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 affirmed.
Lastly, GM is working to restructure its joint venture in China with SAIC Motor as it faces ongoing losses. The company reported a $104 million loss for the second quarter, following a drastic production cut of 70% by SAIC-GM in June, leading to the delivery of only 26,000 vehicles—a 50% decline from the previous year.