General Motors has increased several of its financial targets for 2024 following its strong performance in the second quarter, which exceeded Wall Street’s expectations.
The automaker has adjusted its anticipated adjusted earnings for the year to between $13 billion and $15 billion, up from a previous forecast of $12.5 billion to $14.5 billion. Additionally, GM raised targets for operating cash flow and earnings per share. However, it slightly lowered expectations for net income attributable to shareholders by less than 1%, now estimating it to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, representing a more than 7% increase from the previous year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, exceeding the anticipated $2.71 and showing a 60% increase compared to 2023. The company’s net income grew by 14%, rising to $2.9 billion from $2.5 billion.
Following the announcement, GM’s stock rose nearly 5% in pre-market trading on Tuesday, having increased more than 37% this year. Additionally, GM declared a third-quarter cash dividend after trading closed on Monday, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned the company is working on launching eight new or redesigned models in North America. She also addressed the progress in scaling up production of the electric Chevrolet Equinox, emphasizing GM’s commitment to disciplined volume growth despite the company’s earlier acknowledgment that it would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns. Nevertheless, electric vehicle sales did see growth in the last quarter.
Additionally, Barra announced a shift in strategy for Cruise, GM’s self-driving unit, which will discontinue its Origin vehicle and focus instead on the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a previous halt in production of the Origin, resulting in a $600 million charge for the company. Barra stated that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design and would also reduce production costs and optimize resource allocation.
Barra reaffirmed GM’s commitment to its vision of transforming mobility through autonomous technology, highlighting the ongoing progress made by Cruise as an AI-first company.
The automaker is also restructuring its joint venture in China with SAIC Motor due to ongoing losses, reporting a $104 million loss for the second quarter. In June, production at SAIC-GM was cut by 70%, with only 26,000 vehicles delivered, a 50% decrease compared to the previous year.