General Motors has increased several financial targets for 2024 following a strong performance that exceeded Wall Street’s projections for its second quarter.
The Detroit-based automaker has raised its adjusted earnings expectations for the year to a range of $13 billion to $15 billion, adjusting upwards from a previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has updated its targets for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders was slightly reduced by under 1%, now projected to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, representing a growth of over 7% from the previous year and surpassing Wall Street’s expectation of $45 billion, according to FactSet. The company’s earnings per share stood at $3.06, exceeding analyst expectations of $2.71 per share and marking a 60% increase from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock saw a nearly 5% increase in pre-market trading on Tuesday, and the share price has risen more than 37% this year. On Monday, GM also announced a third-quarter cash dividend, which positively impacted its stock.
In a letter to shareholders, CEO Mary Barra highlighted the popularity of its gas-powered trucks and SUVs, while mentioning the launch of eight new or redesigned models across compact, mid-size, and full-size categories in North America. Barra also confirmed that production of the electric Chevrolet Equinox is being scaled up, emphasizing that GM remains committed to disciplined volume growth despite earlier statements that the company would not meet its goal of producing one million electric vehicles by the end of 2025 due to a slowdown in the market. Nevertheless, the sales of its electric vehicles did experience growth in the last quarter.
Additionally, Barra announced that GM’s self-driving unit, Cruise, which previously faced operational setbacks following an incident last October, will discontinue its Origin vehicle. Instead, Cruise plans to focus on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the halted production of the Origin in Detroit.
During an analyst call, Barra explained that employing the Bolt would alleviate regulatory concerns regarding the distinct design of the Origin, which lacked a steering wheel. She added that this adjustment would reduce costs per unit and allow GM to optimize its resources.
Barra reaffirmed the company’s commitment to transforming mobility through autonomous technology, stating that every mile traveled and every simulation brings Cruise closer to its goals as an AI-first company.
Furthermore, GM is looking to restructure its joint venture in China with SAIC Motor, as it continues to face financial losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM scaled back production by 70%, delivering only 26,000 vehicles, which is a 50% decrease compared to the same period last year, as reported by Automotive News.