General Motors has raised several financial targets for the year 2024 following a strong second quarter that exceeded Wall Street forecasts.
The automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from an earlier estimate of $12.5 billion to $14.5 billion. Additionally, GM has lifted its forecasts 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, a decrease of less than 1%.
In its second quarter, GM reported revenue of $47.9 billion, a more than 7% increase from the same period last year and significantly higher than the $45 billion anticipated by analysts, according to FactSet estimates. Earnings per share were recorded at $3.06, surpassing the expected $2.71 and reflecting a 60% increase from 2023. The company’s net income rose 14% to $2.9 billion, compared to $2.5 billion in the previous year.
As a result of these positive results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, bringing its total gains for the year to over 37%. The company also announced a third-quarter cash dividend, which further boosted investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of its gas-powered trucks and SUVs and revealed that GM is preparing to launch eight new or redesigned models in North America. She also mentioned that the company is ramping up production of the electric Chevrolet Equinox, emphasizing a commitment to disciplined volume growth for its electric vehicle (EV) lineup.
Earlier this month, Barra stated that GM will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing the revised outlook to a slowdown in the market. GM intends to be adaptable and build according to demand, even as EV sales increased in the latest quarter.
Furthermore, Barra announced changes to the company’s self-driving unit, Cruise, which had to reduce its operations following an incident last October. Cruise will discontinue its Origin vehicle and instead focus on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to halting production of the Origin in Detroit.
During an analyst call, Barra explained that utilizing the Chevrolet Bolt would address regulatory concerns regarding the Origin’s unique design, including the absence of a steering wheel. This shift is expected to lower per-unit costs and optimize resources for GM.
“Our vision to transform mobility using autonomous technology remains unchanged, and every mile traveled and every simulation brings us closer because Cruise is an AI-first company,” Barra stated.
Additionally, GM is working to restructure its joint venture in China with SAIC Motor, as it continues to report losses; the company recorded a $104 million loss in the second quarter. In June, the SAIC-GM joint venture reduced production by 70% and delivered 26,000 vehicles, marking a 50% decrease compared to the previous year, as reported by Automotive News.