General Motors has adjusted its financial targets for 2024 following strong performances that exceeded Wall Street expectations in the second quarter.
The automaker has revised its forecasted adjusted earnings for the year to range from $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. GM has also raised its goals for operating cash flow and earnings per share. However, it slightly decreased its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion, down less than 1%.
For the second quarter, GM reported revenues of $47.9 billion, marking a rise of more than 7% from the previous year and surpassing Wall Street’s anticipated $45 billion, according to FactSet estimates. Earnings per share stood at $3.06, exceeding the $2.71 forecasted by analysts and representing a 60% increase compared to 2023. The company’s net income increased 14% to $2.9 billion, up from $2.5 billion.
In pre-market trading on Tuesday, GM’s stock rose nearly 5%, with the stock showing a year-to-date increase of over 37%. After the market close on Monday, GM announced a third-quarter cash dividend, contributing to the stock’s uptick.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned the launch of eight new or redesigned models in North America. Barra noted the ramp-up of production for the electric Chevrolet Equinox, emphasizing GM’s commitment to disciplined growth in electric vehicle (EV) production.
Earlier this month, Barra acknowledged that the company 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. GM plans to adopt a flexible approach to production based on demand, although its EV sales saw growth last quarter.
Additionally, Barra revealed that Cruise, GM’s self-driving unit, would discontinue its Origin vehicle following a pause in operations after an incident last October. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM took a $600 million charge due to the halt in production of the Origin in Detroit.
During a discussion with analysts, Barra explained that using the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacks a steering wheel. This decision is intended to reduce per-unit costs and optimize resources.
“Our vision to transform mobility using autonomous technology remains unchanged,” Barra stated. “Every mile traveled and every simulation brings us closer because Cruise is an AI-first company.”
Furthermore, GM is working to restructure its joint venture in China with SAIC Motor amid ongoing losses, having reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70% and delivered 26,000 vehicles, which is a 50% decline compared to the previous year, according to Automotive News.