General Motors has announced an increase in its financial goals for 2024 following a strong performance that exceeded Wall Street’s expectations for its second quarter. The company has raised its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion, along with higher targets for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders has been trimmed slightly, now expected to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% year-over-year increase and surpassing the $45 billion forecast set by analysts. The company posted earnings per share of $3.06, exceeding the expected $2.71 and reflecting a 60% increase compared to 2023. Net income rose 14%, totaling $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has gained over 37% this year. The company also declared a third-quarter cash dividend, which contributed to the upward movement in stock value.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of GM’s gas-powered trucks and SUVs, mentioning plans to launch eight new or redesigned vehicles across various categories in North America. Barra also emphasized the scaling of production for the electric Chevrolet Equinox, expressing a commitment to “disciplined volume growth” even as the company celebrates its electric vehicle (EV) successes.
Earlier this month, Barra indicated that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. Despite this, the company remains adaptable and plans to produce vehicles based on consumer demand, with a noted increase in EV sales last quarter.
In addition, Barra announced that Cruise, GM’s self-driving division, would discontinue the Origin vehicle, opting instead to use the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million expense related to the suspension of the Origin’s production in Detroit.
During a conference call with analysts, Barra stated that using the Bolt would address regulatory concerns about the unique design of the Origin, which lacks a traditional steering wheel. This decision is expected to reduce costs per unit and enhance resource allocation.
Barra reiterated GM’s commitment to transforming mobility through autonomous technology, emphasizing that the company is dedicated to advancing its vision with every mile and simulation achieved by Cruise.
Additionally, GM is working on restructuring its joint venture in China with SAIC Motor, as the company continues to experience financial losses. In the second quarter, GM reported a $104 million loss related to this venture. In June, production was cut by 70% at SAIC-GM, resulting in a delivery of 26,000 vehicles, or 50% fewer than the previous year.