General Motors has raised several financial targets for 2024 after exceeding Wall Street’s expectations for its second quarter performance.
The automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. It has also 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.
For the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase compared to the previous year and surpassing Wall Street’s expectation of $45 billion. Earnings per share came in at $3.06, exceeding the analyst forecast of $2.71 and representing a 60% increase from last year. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
As a result of these strong figures, GM’s stock rose nearly 5% in pre-market trading on Tuesday, and the company’s stock has appreciated over 37% this year. Following the closing of trading on Monday, GM announced a third-quarter cash dividend, further boosting its stock.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs. She mentioned that GM is currently launching eight new or redesigned models across various vehicle sizes in North America. Barra also emphasized the scaling up of production for the electric Chevrolet Equinox, stating that while the company is pleased with its electric vehicle progress, they remain committed to disciplined volume growth.
Earlier this month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The company has stated its intention to remain flexible and “build to demand,” although it did see an increase in EV sales last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving unit, will discontinue its Origin vehicle after having to scale back operations following an incident last October. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to halting the production of the Origin in Detroit.
During a conference call with analysts, Barra explained that using the Bolt would address regulators’ concerns about the Origin’s unconventional design, such as its absence of a steering wheel. This transition will also help reduce costs per unit and optimize resources.
Barra reiterated GM’s commitment to autonomous technology, stating that their vision for transforming mobility remains firm and that every mile and simulation brings them closer to their goals.
Moreover, GM is working on restructuring its joint venture in China with SAIC Motor, as the company continues to experience financial losses, reporting a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, which is 50% lower than the same period last year.