General Motors has increased several of its financial targets for 2024 following impressive second-quarter results that exceeded Wall Street forecasts. The Detroit automaker has raised its projected adjusted earnings 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. Additionally, GM has revised its targets for operating cash flow and earnings per share, though it slightly lowered the expectations for net income attributable to shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, marking an increase of over 7% compared to the same period last year, and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, exceeding the $2.71 anticipated by analysts and representing a 60% increase from last year. Net income rose 14% to $2.9 billion, up from $2.5 billion.
As a result, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has increased by more than 37% this year. Following the close of trading on Monday, GM announced a third-quarter cash dividend, which further supported the stock’s performance.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of the company’s gas-powered trucks and SUVs, and mentioned that GM is in the process of launching eight new or redesigned models in North America. Barra emphasized the company’s commitment to scaling production of the electric Chevrolet Equinox and expressed enthusiasm about its electric vehicle (EV) initiatives, while also noting the importance of disciplined growth.
Earlier this month, Barra acknowledged that GM would miss its target of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns but stated that the company will adapt and “build to demand.” Despite this, GM’s EV sales did see growth in the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, would no longer pursue its Origin vehicle project, which was temporarily halted following an incident last year. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM also incurred a $600 million charge related to halting production of the Origin in Detroit.
During an analyst call, Barra assured that using the Bolt would address any regulatory concerns regarding the Origin’s unconventional design, such as the absence of a steering wheel. This shift is expected to reduce costs per unit and allow GM to better allocate resources.
Barra also mentioned that GM is restructuring its joint venture in China with SAIC Motor amid ongoing losses, reporting a $104 million loss for the second quarter. In June, production cuts by SAIC-GM resulted in a 70% reduction, yielding only 26,000 vehicle deliveries, a 50% decrease compared to the previous year.