General Motors has increased several financial targets for 2024 following a strong performance that exceeded Wall Street’s expectations for the second quarter.
The Detroit-based automaker now anticipates adjusted earnings for the year to be between $13 billion and $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, while slightly reducing the expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% year-over-year increase and surpassing the $45 billion predicted by analysts. The company’s earnings per share reached $3.06, exceeding the expected $2.71 and marking a 60% increase compared to the previous year. Net income rose 14% to $2.9 billion, up from $2.5 billion.
As a result of these positive financial results, GM’s stock saw an increase of nearly 5% in pre-market trading and has risen over 37% throughout the year. Additionally, GM announced a cash dividend for the third quarter, contributing to the stock’s upward momentum.
In a note to shareholders, CEO Mary Barra highlighted the company’s success with gas-powered trucks and SUVs, revealing plans to launch eight new or redesigned models in North America. She also discussed progress in producing the electric Chevrolet Equinox, expressing confidence in their electric vehicle (EV) strategy, despite a previous statement indicating that GM would not meet its goal of producing 1 million EVs in North America by the end of 2025 due to a slowdown in the market. GM intends to adapt its production to market demand, even as EV sales increased last quarter.
Furthermore, Barra announced that Cruise, GM’s autonomous driving division, would abandon its plans for the Origin vehicle after facing operational setbacks last October. Instead, Cruise will concentrate on the next-generation Chevrolet Bolt for testing in Texas and Arizona. The decision comes after GM incurred a $600 million charge associated with the halted production of the Origin in Detroit.
Barra assured analysts that transitioning to the Bolt would address regulatory concerns related to the Origin’s unconventional design, which lacked a steering wheel. This change is expected to reduce unit costs and help GM manage resources more effectively.
Finally, GM is working to restructure its joint venture with SAIC Motor in China as it continues to experience financial losses, reporting a $104 million loss in the second quarter. Recent production cuts by SAIC-GM of 70% led to a decline in vehicle deliveries, totaling 26,000 units, a 50% drop compared to the previous year.