General Motors is increasing several financial targets for 2024 after exceeding Wall Street projections for its second quarter. The Detroit-based automaker has raised its expected adjusted earnings for the year to a range between $13 billion and $15 billion, up from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has revised its 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.
In the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase from the prior year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share were $3.06, exceeding analysts’ predictions of $2.71 per share and reflecting a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion in the same period last year.
As a result, GM’s stock rose nearly 5% in pre-market trading on Tuesday, and the stock has experienced an increase of more than 37% this year. Following the close of trading on Monday, GM also announced a third-quarter cash dividend, which contributed to the stock’s positive performance.
In her letter to shareholders, CEO Mary Barra highlighted the company’s successful gas-powered trucks and SUVs, and mentioned that GM is in the process of launching eight new or redesigned compact, mid-size, and full-size models in North America. She also stated that GM is ramping up production of the electric Chevrolet Equinox, expressing the company’s commitment to responsible volume growth despite earlier expectations of producing 1 million electric vehicles in North America by the end of 2025, which have been tempered due to market slowdowns.
Furthermore, Barra revealed that Cruise, GM’s self-driving unit that faced operational cutbacks following an incident last October, will discontinue its Origin vehicle. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the cessation of Origin production in Detroit.
During an analyst call, Barra suggested that using the Bolt would alleviate regulatory concerns regarding the Origin’s distinctive design, which lacked a traditional steering wheel. This transition will lower costs per unit and enable GM to improve resource allocation.
Barra reaffirmed GM’s commitment to transforming mobility through autonomous technology, stating that each mile traveled and every simulation gets the company closer to its goals as Cruise remains focused on artificial intelligence.
Lastly, GM is working on restructuring its joint venture with SAIC Motor in China due to ongoing losses, reporting a $104 million loss for the second quarter. SAIC-GM significantly reduced production by 70% in June, delivering 26,000 vehicles, which is 50% lower than the previous year, as noted by Automotive News.