General Motors has increased several financial targets for 2024 following a strong performance in its second quarter that exceeded Wall Street’s expectations.
The Detroit-based automaker raised its projected adjusted earnings for the year to a range of $13 billion to $15 billion, an improvement from the earlier forecast of $12.5 billion to $14.5 billion. Additionally, GM has elevated its expectations for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders was slightly decreased, now estimated to be 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 a year prior and surpassing Wall Street’s anticipated figure of $45 billion. Earnings per share reached $3.06, exceeding the expected $2.71, and reflecting a 60% increase from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion the previous year.
Following this financial news, GM’s stock rose nearly 5% in pre-market trading on Tuesday, with the stock price increasing over 37% this year. The company also declared a cash dividend for the third quarter after trading closed on Monday, further boosting its stock.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs. She mentioned that the company is preparing to launch eight new or redesigned models in North America. Barra also discussed the scaling of production for the electric Chevrolet Equinox and emphasized GM’s commitment to disciplined volume growth, despite a previous statement indicating the company would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to market challenges.
Furthermore, the CEO announced that Cruise, GM’s autonomous vehicle division, will discontinue its Origin vehicle and instead focus on testing next-generation Chevrolet Bolt models in Texas and Arizona. GM previously took a $600 million charge related to halting production of the Origin in Detroit. Barra noted that using the Bolt could address regulatory concerns about the Origin’s distinctive design and also help lower production costs.
GM continues to work on restructuring its joint venture with SAIC Motor in China, as it reported a loss of $104 million for the second quarter. The joint venture slashed production by 70% in June and delivered only 26,000 vehicles, marking a 50% decrease compared to the previous year.