General Motors has announced an increase in several financial targets for 2024 following a strong performance in the second quarter that exceeded Wall Street’s expectations. The Detroit-based automaker has revised 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. It has also lifted its forecasts for operating cash flow and earnings per share, while slightly lowering the net income projection for shareholders to between $10 billion and $11.4 billion.
In its second-quarter results, GM reported revenue of $47.9 billion, marking a more than 7% increase from the previous year and surpassing the anticipated $45 billion, according to FactSet estimates. The company posted earnings per share of $3.06, exceeding the analysts’ expectations of $2.71 and reflecting a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion from $2.5 billion.
Following these announcements, GM’s stock surged nearly 5% in pre-market trading on Tuesday, contributing to an overall increase of more than 37% for the year. Additionally, the company declared a third-quarter cash dividend after trading closed on Monday.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She mentioned the company’s plans to introduce eight new or redesigned compact, mid-size, and full-size models in North America. Barra also discussed the scaling production of the electric Chevrolet Equinox, emphasizing GM’s commitment to disciplined volume growth, despite earlier comments indicating the company would not meet its objective of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown.
Further, Barra revealed that GM’s self-driving unit, Cruise, which had to scale back operations following an incident last October, would discontinue its Origin vehicle in favor of utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes with a $600 million charge linked to the halt in Origin production in Detroit. Barra noted that opting for the Bolt would address regulatory concerns related to the Origin’s unconventional design and also help reduce costs per unit.
“Our vision to transform mobility using autonomous technology remains intact, and each mile traveled and each simulation brings us closer to our goals since Cruise operates as an AI-first company,” Barra stated.
Additionally, GM is working on restructuring its joint venture in China with SAIC Motor, as it continues to face losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, which is a 50% decline compared to the same time last year.