General Motors has raised several financial targets for 2024 following a strong performance that exceeded Wall Street’s expectations for the second quarter.
The automaker has increased its adjusted earnings forecast 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. It has also raised its targets for operating cash flow and earnings per share, while slightly decreasing expectations for net income attributable to shareholders by under 1%, now projected between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, which marks a more than 7% increase from the previous year and surpasses the Wall Street estimate of $45 billion. Earnings per share reached $3.06, beating analyst expectations of $2.71, and reflecting a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, compared to $2.5 billion in the same quarter last year.
Following this news, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to an overall increase of more than 37% for the year. After markets closed on Monday, GM announced a third-quarter cash dividend, further boosting investor sentiment.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of their gas-powered trucks and SUVs, stating that the company is working on launching eight new or redesigning existing models in North America. She also remarked on the scaling production of the electric Chevrolet Equinox, emphasizing their commitment to measured growth despite the early successes in the EV sector.
Earlier this month, Barra acknowledged that GM would not achieve its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. However, she indicated that GM would adapt its production to meet demand, noting growth in EV sales from the previous quarter.
Barra also revealed that the company’s self-driving division, Cruise, will discontinue its Origin vehicle after previously having to scale back operations following an incident last October. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM has accounted for a $600 million charge due to the suspension of Origin production in Detroit.
During a call with analysts, Barra explained that using the Bolt addresses regulatory concerns regarding the Origin’s unconventional design, which included the absence of a steering wheel. This shift is expected to reduce costs per unit and improve resource allocation.
“Our vision to transform mobility through autonomous technology remains steadfast, and every mile traveled and every simulation brings us closer, as Cruise operates as an AI-first company,” Barra stated.
Additionally, GM is undertaking a restructuring of its joint venture in China with SAIC Motor, where it has faced notable losses, including a $104 million loss in the second quarter. In June, SAIC-GM significantly cut production by 70%, resulting in the delivery of just 26,000 vehicles, which is 50% fewer than the previous year, according to Automotive News.