General Motors is increasing several financial targets for 2024 following a strong performance that exceeded Wall Street expectations for its second quarter results.
The Detroit-based automaker has raised its forecast for adjusted earnings this year to a range of $13 billion to $15 billion, an increase from the earlier estimate of $12.5 billion to $14.5 billion. GM has also adjusted its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders by less than 1%, now projected 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 surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, exceeding the anticipated $2.71, and grew 60% year-over-year. Net income climbed 14% to $2.9 billion, up from $2.5 billion.
As a result of these positive developments, GM’s stock rose nearly 5% in pre-market trading on Tuesday, and the stock has increased over 37% this year. Following the market close on Monday, GM also announced a cash dividend for the third quarter, which provided a further boost to the stock.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, stating that the company is launching eight new or redesigned models across various sizes in North America. Barra emphasized the company’s commitment to disciplined growth as they scale production of the electric Chevrolet Equinox, despite earlier comments regarding not meeting the goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown.
In other news, CEO Barra announced that Cruise, GM’s self-driving unit which faced setbacks after an incident last October, will discontinue its Origin vehicle. Instead, the focus will shift to using the next-generation Chevrolet Bolt for testing purposes in Texas and Arizona. GM also incurred a $600 million charge related to halting production of the Origin in Detroit.
During a recent analyst call, Barra remarked that employing the Bolt addresses regulatory concerns about the Origin’s unique design and will help reduce costs while optimizing resources. She reiterated GM’s vision to transform mobility with autonomous technology, affirming that every step taken brings the company closer to achieving its goals.
Additionally, GM is working to restructure its joint venture in China with SAIC Motor, which has experienced continued losses, reporting a $104 million loss in the second quarter. SAIC-GM reduced production by 70% in June, delivering only 26,000 vehicles, which is 50% less than the same period last year, as reported by Automotive News.