General Motors is setting higher financial goals for 2024 after exceeding Wall Street predictions in its second quarter results. The Detroit-based automaker has increased its adjusted earnings forecast for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, while slightly adjusting its expected net income for shareholders downwards by less than 1%, projecting between $10 billion and $11.4 billion.
In a notable performance, GM reported second-quarter revenues of $47.9 billion, reflecting a more than 7% increase from the prior year, surpassing Wall Street’s estimate of $45 billion. Earnings per share were reported at $3.06, exceeding analyst expectations of $2.71 and marking a 60% increase compared to 2023. The company saw its net income rise 14% to $2.9 billion, up from $2.5 billion in the same quarter last year.
Following these impressive results, GM’s stock saw a nearly 5% increase in pre-market trading, contributing to an overall rise of over 37% in the stock’s value this year. GM also announced a cash dividend for the third quarter, providing additional motivation for investors.
CEO Mary Barra highlighted the company’s solid performance with gas-powered trucks and SUVs, while revealing plans for the launch of eight new models in North America. Barra emphasized GM’s commitment to disciplined growth in electric vehicle (EV) production, mentioning the scaling of the electric Chevrolet Equinox. However, she did acknowledge that the company would not meet its goal of producing 1 million EVs in North America by the end of 2025 due to a slowdown in the market, advocating for a flexible approach of building to demand, despite an uptick in EV sales last quarter.
In a shift in strategy for its autonomous vehicle division, GM’s Cruise unit will discontinue its plans for the Origin vehicle, redirecting efforts towards utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This change comes after Cruise was compelled to scale back operations following an incident last October. Barra indicated that the decision to use the Bolt would address regulatory concerns regarding the Origin’s unique design and would help lower production costs.
Moreover, GM is working on restructuring its joint venture in China with SAIC Motor, as it faces ongoing losses, including a $104 million loss for the second quarter. In June, SAIC-GM drastically reduced production by 70%, yielding just 26,000 vehicle deliveries, which is 50% less than the previous year.
In summary, GM’s recent performance indicates a strong outlook for the company despite challenges in the EV market and international operations. The focus on disciplined growth, strategic adjustments, and commitment to innovation presents a promising future for General Motors. As the company navigates these challenges, its proactive steps suggest a determination to lead in both traditional and electric vehicle markets.