General Motors has announced an increase in its financial targets for 2024 after exceeding Wall Street’s expectations for its second quarter. The automaker has revised 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. Additionally, GM has 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 the second quarter, GM reported revenue of $47.9 billion, representing a more than 7% increase from the previous year and surpassing Wall Street’s forecast of $45 billion, according to FactSet estimates. Earnings per share stood at $3.06, exceeding the anticipated $2.71 per share and showing a 60% increase year-over-year. Net income rose 14% to $2.9 billion, compared to $2.5 billion last year.
Following this positive news, GM’s stock surged nearly 5% in pre-market trading, contributing to a year-to-date increase of over 37%. On Monday, GM also declared a cash dividend for the third quarter, which provided additional support for the stock.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, as well as the launch of eight new or redesigned models in North America. Barra mentioned the scaling up of production for the electric Chevrolet Equinox, emphasizing GM’s commitment to disciplined volume growth despite earlier comments about the company not meeting its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown.
Barra also announced a strategic shift for Cruise, GM’s self-driving unit, which will discontinue its Origin vehicle and instead focus on the next-generation Chevrolet Bolt for testing purposes in Texas and Arizona. GM incurred a $600 million charge related to the suspension of Origin production.
In a call with analysts, Barra explained that utilizing the Bolt would address regulatory concerns tied to the Origin’s unique design, which lacked a steering wheel. This move is expected to reduce costs per unit and improve resource allocation.
Lastly, GM is restructuring its joint venture with SAIC Motor in China, as the company continues to face losses, reporting a $104 million loss for the second quarter. In June, production cuts by SAIC-GM reduced output by 70%, leading to a delivery of 26,000 vehicles, which is a 50% decrease compared to the same period last year.