General Motors has announced numerous financial targets for 2024 after exceeding Wall Street’s expectations in its second quarter results.
The Detroit automaker has increased 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, it raised its targets for operating cash flow and earnings per share, while slightly reducing expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In its second quarter, GM reported revenue of $47.9 billion, representing an increase of over 7% compared to the same period last year, and surpassing Wall Street’s estimate of $45 billion. Earnings per share reached $3.06, exceeding the anticipated $2.71 and marking a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock experienced a nearly 5% rise in pre-market trading. The stock has increased by more than 37% this year. On Monday, GM also declared a cash dividend for the third quarter, contributing to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra highlighted GM’s successful gas-powered trucks and SUVs and noted that the company is launching eight new or redesigned models in North America. Barra emphasized that GM is ramping up production of the electric Chevrolet Equinox, stating the company is committed to disciplined volume growth despite early success in the electric vehicle (EV) sector.
Earlier this month, Barra acknowledged that GM will 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 plans to adopt a flexible approach and “build to demand,” although it did see growth in EV sales last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving unit, would discontinue its Origin vehicle, shifting focus to the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes after Cruise had to scale back its operations following an incident last October. GM incurred a $600 million charge related to the suspension of the Origin’s production in Detroit.
Barra stated that using the Chevrolet Bolt would address regulators’ concerns regarding the unique design of the Origin, such as its lack of a steering wheel. This change is expected to reduce per unit costs and optimize GM’s resources.
“Our vision to transform mobility using autonomous technology is unchanged,” Barra declared, adding that every mile driven and every simulation moves Cruise closer to its goals as an AI-first company.
Furthermore, GM is working to restructure its joint venture with SAIC Motor in China, where it has faced financial setbacks, reporting a $104 million loss in the second quarter. Recently, SAIC-GM had to cut production by 70%, managing to deliver 26,000 vehicles, which is down 50% from the previous year.