General Motors has increased its financial targets for 2024 after exceeding Wall Street’s expectations for its second quarter results.
The Detroit-based automaker has raised its forecast for adjusted earnings for the year to between $13 billion and $15 billion, up from the previous range of $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share, although the expected net income attributable to shareholders has been slightly lowered by less than 1%, now projected to be between $10 billion and $11.4 billion.
The company reported revenues of $47.9 billion for the second quarter, which marks an increase of over 7% compared to the same period last year and surpasses the anticipated $45 billion according to FactSet estimates. Earnings per share reached $3.06, exceeding analyst expectations of $2.71, and reflecting a 60% increase year over year. Net income for the quarter rose 14% to $2.9 billion, up from $2.5 billion.
In response to these strong results, GM’s stock surged nearly 5% in pre-market trading and has risen more than 37% in value this year. Following Monday’s trading session, GM declared a cash dividend for the third quarter, contributing to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of the company’s gas-powered trucks and SUVs, noting that GM is set to introduce eight new or redesigned models across compact, mid-size, and full-size categories in North America. She emphasized GM’s commitment to disciplined growth in electric vehicle production, particularly for the new Chevrolet Equinox, despite acknowledging 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 slowdown in the market.
Barra also announced a strategic shift for Cruise, GM’s self-driving division, which has decided to discontinue its Origin vehicle in favor of using the updated Chevrolet Bolt for testing in Texas and Arizona. This decision follows a $600 million charge related to the halt in production of the Origin.
During a call with analysts, Barra explained that using the Bolt addresses regulatory concerns regarding the Origin’s unconventional design and will lower production costs while optimizing resources. She reiterated GM’s vision of transforming mobility through autonomous technology, emphasizing that each step forward in technology gets the company closer to its goals.
Furthermore, GM is working to restructure its joint venture with SAIC Motor in China, facing ongoing financial losses. The automaker reported a $104 million loss for the second quarter, while production cuts by SAIC-GM led to a 70% reduction, resulting in just 26,000 vehicle deliveries, which is a 50% decrease compared to the previous year.