General Motors has raised its financial targets for 2024 after significantly exceeding Wall Street expectations in its recent second quarter results.
The Detroit-based automaker has adjusted its anticipated adjusted earnings for the year to fall between $13 billion and $15 billion, an increase from the previous range of $12.5 billion to $14.5 billion, while also raising its projections for operating cash flow and earnings per share. However, expectations for net income attributable to shareholders were slightly lowered by less than 1%, now estimated to be between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the previous year and surpassing Wall Street’s anticipated $45 billion. Earnings per share stood at $3.06, exceeding analyst predictions of $2.71 per share and reflecting a 60% increase compared to 2023. The company also saw a 14% rise in net income, which reached $2.9 billion, up from $2.5 billion.
In pre-market trading on Tuesday, GM shares rose nearly 5%. The stock has now increased over 37% this year. Following the closure of trading on Monday, GM declared a cash dividend for the third quarter, further boosting its stock price.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of the company’s gas-powered trucks and SUVs, noting plans to launch eight new or redesigned models across various sizes in North America. Barra also reassured shareholders regarding the scaling production of the electric Chevrolet Equinox, emphasizing a commitment to disciplined growth in electric vehicle (EV) sales despite earlier comments about challenges in reaching the target of producing 1 million EVs in North America by the end of 2025 due to a market slowdown.
Additionally, the CEO announced that Cruise, GM’s self-driving unit which previously scaled back operations following an incident last October, will no longer use its Origin vehicle. Instead, the company will concentrate on testing with the next-generation Chevrolet Bolt in Texas and Arizona. GM incurred a $600 million charge related to ceasing production of the Origin in Detroit.
During a conference call with analysts, Barra expressed that utilizing the Bolt addresses regulatory concerns associated with the unique design of the Origin, such as the absence of a steering wheel. This decision is also expected to reduce costs and enhance resource optimization.
“Our vision to transform mobility with autonomous technology remains firm, and with every mile and simulation, we move closer to that goal because Cruise is fundamentally an AI-first company,” Barra stated.
Furthermore, GM is actively working to restructure its joint venture in China with SAIC Motor, which has been facing financial difficulties; the company reported a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, representing a 50% decline compared to the same period last year.