General Motors has increased several financial targets for 2024 after exceeding Wall Street’s expectations in its second-quarter results. The company raised its anticipated adjusted earnings for the year to between $13 billion and $15 billion, up from a previous range of $12.5 billion to $14.5 billion, along with improvements in its operating cash flow and earnings per share targets. However, GM slightly lowered its expectations for net income attributable to shareholders by less than 1%, now predicting between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase compared to the same period last year, and surpassing Wall Street’s estimate of $45 billion. Earnings per share stood at $3.06, exceeding the expected $2.71 and reflecting a 60% growth from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has increased over 37% this year. The company also declared a third-quarter cash dividend, further boosting investor confidence.
CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs in a letter to shareholders, mentioning plans to launch eight new or redesigned models in North America, including compact, mid-size, and full-size vehicles. She confirmed that GM is ramping up production of the electric Chevrolet Equinox and emphasized a commitment to disciplined volume growth despite earlier stating that the company will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, due to a market slowdown.
Additionally, Barra announced a shift in strategy for Cruise, GM’s autonomous driving division, which will no longer pursue its Origin vehicle but will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This move follows a production halt of the Origin, for which GM incurred a $600 million charge.
Barra noted that using the Bolt would address regulatory concerns regarding the unique design of the Origin, including its lack of a steering wheel, while also reducing unit costs and optimizing resources.
The company is also restructuring its joint venture with SAIC Motor in China, which has continued to incur losses; GM reported a $104 million loss for the second quarter. Production cuts by SAIC-GM in June resulted in a 70% reduction, with the joint venture delivering 26,000 vehicles, a 50% decrease compared to the previous year.