General Motors (GM) has increased several financial targets for 2024 after exceeding Wall Street’s expectations in its second quarter results. The Detroit-based automaker now expects adjusted earnings of between $13 billion and $15 billion, a notable raise from its 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, although the forecast for net income attributed to shareholders was slightly decreased to between $10 billion and $11.4 billion.
In the second quarter alone, GM generated revenue of $47.9 billion, marking a more than 7% increase compared to the previous year and surpassing the $45 billion anticipated by analysts. The company’s earnings per share also impressed, reaching $3.06 against the expected $2.71, and representing a 60% increase from last year’s figures. Net income climbed to $2.9 billion, a 14% rise from the $2.5 billion recorded in the same quarter last year.
Following these promising results, GM’s stock saw a near 5% jump in pre-market trading, making a 37% increase in value thus far for the year. The company also declared a cash dividend for the third quarter, which further fueled investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of their gas-powered trucks and SUVs. She elaborated that GM is preparing to unveil eight new or redesigned models in North America. Barra assured shareholders of the company’s commitment to disciplined growth in electric vehicles (EVs), despite acknowledging that GM will not meet its goal of producing 1 million EVs in North America by the end of 2025 due to a slowdown in the market. Nevertheless, GM’s EV sales displayed growth last quarter.
Additionally, Barra provided an update on Cruise, GM’s self-driving unit, which has shifted focus from the Origin vehicle to utilizing the next-generation Chevrolet Bolt for tests in Texas and Arizona. GM took a significant $600 million charge over the discontinuation of the Origin’s production in Detroit, a decision aimed at addressing regulatory concerns about its unconventional design while also reducing costs.
The company is also reassessing its joint venture in China with SAIC Motor, which has resulted in sustained losses. In the second quarter, GM reported a $104 million loss related to this partnership, following a steep 70% production cut by SAIC-GM which led to 26,000 vehicle deliveries—50% less than the previous year.
Despite the challenges, GM’s forward-looking strategies and strong second-quarter performance suggest a resilient path ahead. As the automotive landscape is rapidly changing, GM’s emphasis on both traditional and electric vehicles showcases its commitment to adapting to consumer demands and technological advancements.
Overall, GM’s proactive strategies and positive financial performance illustrate its adaptability in a dynamic market and lay a hopeful foundation for future growth.