General Motors has announced an increase in its financial targets for 2024 following outstanding second-quarter performance that exceeded Wall Street’s expectations.
The automaker has raised its projected adjusted earnings for the year to between $13 billion and $15 billion, up from the previous range of $12.5 billion to $14.5 billion, along with enhancing its expectations for operating cash flow and earnings per share. The forecast for net income attributable to shareholders was slightly lowered by less than 1%, now estimated at between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, representing a more than 7% increase from the previous year and exceeding the $45 billion anticipated by analysts, according to FactSet estimates. Earnings per share came in at $3.06, surpassing the forecast of $2.71, and showing a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock jumped nearly 5% in pre-market trading on Tuesday, and it has gained over 37% this year. Additionally, GM announced a cash dividend for the third quarter, which further boosted investor sentiment.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gasoline-powered trucks and SUVs, mentioning that GM is set to introduce eight new or redesigned models in North America. She also emphasized the ramp-up in production of the electric Chevrolet Equinox, stating the company’s commitment to sustainable volume growth amidst their enthusiasm for electric vehicles.
Barra had previously noted 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. The company intends to be flexible and “build to demand,” although it reported growth in EV sales in the last quarter.
Additionally, Barra announced that Cruise, GM’s autonomous driving unit that had to scale back operations due to an incident last October, will be abandoning its Origin vehicle project. Instead, Cruise will focus on deploying the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the discontinuation of the Origin’s production in Detroit.
During a recent call with analysts, Barra reassured that utilizing the Bolt would address regulatory concerns regarding the Origin’s distinctive design, which lacks a steering wheel. This strategy is expected to reduce costs and optimize resource allocation for GM.
“Our vision to transform mobility using autonomous technology remains unwavering,” Barra stated. “Every mile traveled and every simulation takes us closer to our goals, as Cruise operates as an AI-first company.”
Moreover, GM is working to restructure its joint venture in China with SAIC Motor, which has been experiencing financial losses. The company reported a $104 million loss for the second quarter, following a 70% production cut by SAIC-GM in June, which resulted in deliveries dropping to 26,000 vehicles, a 50% decrease from the previous year.