General Motors has increased several financial targets for 2024 following a strong performance that exceeded Wall Street expectations in the second quarter.
The Detroit-based automaker has raised its forecast for adjusted earnings to between $13 billion and $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. It has also set higher targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking an increase of over 7% compared to the same period last year, and surpassing the $45 billion target anticipated by analysts. Earnings per share reached $3.06, exceeding the forecast of $2.71 and representing a 60% increase from 2023. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
As a result of these positive financial results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, continuing its strong performance with a year-to-date increase of over 37%. Following the market close on Monday, GM announced a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra praised the strong sales of the company’s gas-powered trucks and SUVs and announced plans to introduce eight new or redesigned models in North America. She also highlighted the ramp-up in production of the electric Chevrolet Equinox, stating that while they remain excited about electric vehicles (EVs), the company is committed to managing production in line with demand.
However, Barra revealed earlier this month that GM will not achieve its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. Despite this, EV sales did see an uptick last quarter.
Additionally, Barra announced a strategic shift in Cruise, GM’s self-driving division, which will discontinue its Origin vehicle. Instead, the focus will shift to using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes after GM took a $600 million charge related to the suspension of Origin production in Detroit.
During a discussion with analysts, Barra noted that using the Bolt should alleviate regulatory concerns regarding the unique design of the Origin, which lacks a traditional steering wheel. This change is expected to reduce production costs and help GM optimize its resources.
“Our vision to transform mobility with autonomous technology remains unchanged,” Barra stated. “Every mile traveled and every simulation moves us closer as Cruise continues to operate as an AI-first company.”
GM is also working to restructure its joint venture with SAIC Motor in China, where it experienced a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production, delivering only 26,000 vehicles, which is 50% fewer compared to the previous year.