General Motors (GM) has significantly raised its financial targets for 2024 following a strong performance that exceeded Wall Street’s expectations in the second quarter. The Detroit-based automaker now anticipates adjusted earnings for the year to be between $13 billion and $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has adjusted its projections for operating cash flow and earnings per share upwards. However, the expectation for net income attributable to shareholders has decreased slightly, now estimated between $10 billion and $11.4 billion.
The company reported revenues of $47.9 billion for the second quarter, indicating a rise of over 7% year-on-year, surpassing Wall Street’s expectation of $45 billion. GM’s earnings per share also impressed, coming in at $3.06 against the anticipated $2.71 and marking a substantial 60% increase compared to 2023. Net income rose 14% from the previous year to reach $2.9 billion, up from $2.5 billion.
Following this positive news, GM’s stock surged nearly 5% in pre-market trading, adding to a year-to-date increase of more than 37%. On Monday, the automaker declared a third-quarter cash dividend, further boosting investor confidence.
In her communication to shareholders, CEO Mary Barra emphasized the robust demand for GM’s gas-powered trucks and SUVs and revealed plans to launch eight new or revamped models in North America. She announced that production of the electric Chevrolet Equinox is ramping up, stating the company is “excited about our EVs” while remaining committed to “disciplined volume growth.”
Despite earlier projections of producing 1 million electric vehicles in North America by the end of 2025, Barra acknowledged that GM would not meet this target due to a market slowdown. While EV sales increased last quarter, the company plans to be flexible and adjust production according to demand.
On another note, she disclosed that GM’s self-driving subsidiary, Cruise, will discontinue the development of its Origin vehicle, focusing instead on the next-gen Chevrolet Bolt for testing in Texas and Arizona. This decision follows scrutiny from regulators regarding the Origin’s unconventional design and is expected to reduce costs and optimize GM’s resources.
Barra reiterated the company’s unwavering vision to innovate mobility through autonomous technology, emphasizing that every mile traveled, along with every simulation, moves Cruise closer to its goals.
Additionally, GM is actively working to restructure its joint venture in China with SAIC Motor, amid ongoing losses. In the second quarter, GM recorded a $104 million loss in this partnership. The joint venture saw production slashed by 70% in June, with vehicle deliveries falling 50% compared to the previous year.
This recent development for GM reflects a company capitalizing on the strengths of its traditional vehicle lineup, while also adapting to the evolving landscape of electric and autonomous vehicles. By focusing on tried-and-true models while navigating the complexities of market demands, GM appears poised for a hopeful transition into the future of mobility.