General Motors is updating its financial targets for 2024 after exceeding Wall Street expectations in its second quarter. The Detroit-based automaker has increased its forecast for adjusted earnings 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 raised its projections for operating cash flow and earnings per share, although the net income forecast for shareholders has been slightly adjusted downwards to between $10 billion and $11.4 billion.
In its second-quarter results, GM reported revenue of $47.9 billion, representing over a 7% increase from the same period last year and surpassing the anticipated $45 billion benchmark. Earnings per share stood at $3.06, exceeding the $2.71 forecast from analysts, and marking a 60% increase compared to 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
Following the earnings announcement, GM’s stock surged nearly 5% in pre-market trading, building on a remarkable 37% gain this year. Furthermore, the company has declared a third-quarter cash dividend, providing additional momentum for its share price.
In a communication to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, noting the introduction of eight new or redesigned models in North America. Barra also mentioned ongoing production expansion for the electric Chevrolet Equinox and affirmed GM’s commitment to “disciplined volume growth” despite recent setbacks in EV production targets.
Earlier this month, Barra acknowledged that the company will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. Nonetheless, GM plans to adapt its production strategies based on demand, and EV sales did show growth in the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, will discontinue its Origin vehicle model. Instead, Cruise will pivot to using the next-generation Chevrolet Bolt as it conducts testing in Texas and Arizona. GM has taken a $600 million charge relating to the halt in Origin production.
During an earnings call, Barra reassured analysts that utilizing the Bolt would address regulatory concerns about the Origin’s unconventional design, which lacked a steering wheel. This shift is also expected to reduce costs per unit and allow for better resource management.
GM is also working to restructure its joint venture in China with SAIC Motor, which has seen significant losses, including a $104 million loss in the second quarter. In June, the SAIC-GM partnership reduced production by 70% and delivered 26,000 vehicles, a 50% decrease compared to the previous year.