General Motors is increasing several financial targets for 2024 after exceeding Wall Street’s expectations for its second quarter results.
The Detroit-based automaker has raised its predicted 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 enhanced its targets for operating cash flow and earnings per share. The forecast for net income attributable to shareholders saw a minor reduction of less than 1%, now estimated between $10 billion and $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, reflecting a greater than 7% increase compared to the same period last year and surpassing Wall Street’s expectations of $45 billion. Earnings per share reached $3.06, significantly exceeding the anticipated $2.71 and representing a 60% increase compared to 2023. Net income grew by 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock experienced a nearly 5% rise in pre-market trading on Tuesday, contributing to a year-to-date increase of over 37%. The company also declared a third-quarter cash dividend, which further supported the stock price.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned the company is set to launch eight new or redesigned models in North America. Barra emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox, stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
However, Barra noted earlier in the month that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company remains flexible and plans to “build to demand,” although EV sales did see growth last quarter.
Barra also announced that Cruise, GM’s self-driving unit, will discontinue its Origin vehicle and instead focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the halt in Origin production in Detroit.
During a call with analysts, Barra explained that using the Bolt for autonomous tests would address any regulatory concerns regarding the unique design of the Origin, such as its lack of a steering wheel. This change is expected to reduce per unit costs and enhance resource optimization.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” Barra stated.
Moreover, GM is working to restructure its joint venture in China with SAIC Motor as it faces ongoing losses, having reported a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is 50% less than the previous year, according to reports.