General Motors is increasing several financial targets for 2024 following impressive results that exceeded Wall Street expectations for the second quarter.
The company has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has adjusted its goals for operating cash flow and earnings per share, while expectations for net income attributable to shareholders have been revised slightly downward to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, a year-over-year increase of over 7% that surpassed Wall Street’s forecast of $45 billion. Earnings per share stood at $3.06, exceeding the expected $2.71, marking a 60% increase compared to 2023. The net income rose by 14%, totaling $2.9 billion, up from $2.5 billion.
As a result, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has increased more than 37% this year. Following Monday’s trading session, the company announced a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gasoline-powered trucks and SUVs and indicated that the company is set to launch eight new or redesigned vehicle models across different sizes in North America. Furthermore, she emphasized the ramp-up in production of the electric Chevrolet Equinox, noting that the company aims to achieve disciplined volume growth in the EV sector.
Earlier this month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. She assured stakeholders that the company will adapt to market demand, although EV sales did see growth last quarter.
Barra also announced a shift in strategy for GM’s self-driving unit, Cruise, which had previously paused operations after an incident last year. The company will discontinue its Origin vehicle and instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the suspension of Origin production in Detroit.
During a call with analysts, Barra mentioned that using the Bolt will address regulatory concerns regarding the Origin’s unconventional design that did not include a steering wheel. This change is expected to reduce costs per unit and enhance resource allocation.
“Our vision to transform mobility using autonomous technology remains unchanged, and each mile driven, along with every simulation, brings us closer to our goals as Cruise continues to operate as an AI-first company,” Barra stated.
Additionally, GM is working to restructure its joint venture in China with SAIC Motor due to ongoing losses, reporting a $104 million loss for the second quarter alone. In June, SAIC-GM reduced production by 70%, leading to the delivery of 26,000 vehicles, which is 50% lower compared to the same period last year.