General Motors has increased several financial targets for 2024 after exceeding Wall Street’s predictions for its second quarter results. The Detroit-based automaker has adjusted its expected adjusted earnings for the year to a range of $13 billion to $15 billion, up from an earlier forecast of $12.5 billion to $14.5 billion. It also raised its goals for operating cash flow and earnings per share. However, expectations for net income attributable to shareholders were slightly lowered by less than 1%, now projected between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase year-over-year and surpassing the anticipated $45 billion, as per FactSet estimates. The earnings per share stood at $3.06, exceeding the expected $2.71 and reflecting a 60% rise compared to 2023. Net income rose by 14% to $2.9 billion, compared to $2.5 billion in the previous year.
In pre-market trading on Tuesday, GM’s stock surged almost 5%. The stock has seen an increase of more than 37% throughout the year. Following Monday’s trading session, GM announced a cash dividend for the third quarter, contributing to the stock’s rise.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of its gas-powered trucks and SUVs, and mentioned the launch of eight new or redesigned compact, mid-size, and full-size models in North America. Barra also reiterated GM’s commitment to scaling production of the electric Chevrolet Equinox, stating that while they are excited about electric vehicles and their initial success, they remain dedicated to disciplined growth in volume.
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 slowdown in the market. The company plans to be adaptable and “build to demand,” although EV sales increased last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division which had to scale back operations following an incident last October, will abandon its Origin vehicle project. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for testing purposes in Texas and Arizona. GM incurred a $600 million charge related to the halt in production of the Origin in Detroit.
During an analyst call, Barra indicated that using the Bolt would address regulatory concerns related to the unique design of the Origin, which lacked a steering wheel. This adjustment is expected to reduce per-unit costs and allow GM to better allocate its resources.
“Our vision to transform mobility using autonomous technology remains steadfast, and each mile traveled and every simulation brings us closer because Cruise is an AI-first company,” Barra remarked.
Moreover, GM is working on restructuring its joint venture with SAIC Motor in China, as the partnership continues to experience losses, including a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles—50% less than the same period last year, according to Automotive News.