General Motors has raised its financial targets for 2024 following strong performance that exceeded Wall Street’s predictions for its second quarter.
The Detroit-based automaker has revised its expected adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. Additionally, it has raised its goals for operating cash flow and earnings per share. However, expectations for net income attributable to shareholders were slightly adjusted downwards by less than 1%, now projected to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting an increase of over 7% compared to the previous year, and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. The company’s earnings per share reached $3.06, exceeding the analysts’ expectation of $2.71 per share, and showed a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion in the same quarter last year.
The stock saw nearly a 5% increase in pre-market trading on Tuesday and has appreciated over 37% year-to-date. Following Monday’s trading session, GM announced a cash dividend for the third quarter, contributing to the stock’s rise.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, noting the launch of eight new or redesigned models in North America. Additionally, she referenced the scaling production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined volume growth despite earlier announcements that GM may not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown.
Barra also revealed that Cruise, GM’s autonomous vehicle division, would discontinue its Origin vehicle and instead focus on deploying the next-generation Chevrolet Bolt for testing in Texas and Arizona. The decision comes after the company incurred a $600 million charge related to ceasing production of the Origin in Detroit.
During an analyst call, Barra stated that utilizing the Bolt would mitigate regulator concerns regarding the Origin’s unconventional design, which lacked a steering wheel. This shift is expected to reduce per-unit costs and help optimize GM’s resource allocation.
“We remain committed to transforming mobility with autonomous technology, and each mile traveled and simulation brings us closer because Cruise operates as an AI-first company,” Barra stated.
Furthermore, GM is looking to restructure its joint venture in China with SAIC Motor as it continues to incur losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70% and delivered 26,000 vehicles, marking a 50% decline from the previous year, as reported by Automotive News.