General Motors (GM) has announced an increase in several financial targets for 2024 following a strong performance that surpassed Wall Street’s predictions for its second quarter. The Detroit-based automaker raised its adjusted earnings projection 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 revised its goals for operating cash flow and earnings per share, although it slightly lowered the anticipated net income for shareholders to between $10 billion and $11.4 billion, down by less than 1%.
In the second quarter, GM’s revenue reached $47.9 billion, marking a more than 7% increase compared to the previous year and exceeding analysts’ expectations of $45 billion, according to FactSet. Earnings per share stood at $3.06, significantly higher than the anticipated $2.71 and representing a 60% gain from last year. The company’s net income climbed 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock experienced a nearly 5% surge in pre-market trading and has risen over 37% throughout the year. The company also declared a third-quarter cash dividend, providing additional incentive for investors.
In a letter to shareholders, CEO Mary Barra emphasized the success of GM’s gas-powered trucks and SUVs and highlighted plans to introduce eight new or redesigned vehicle models in North America. Barra specifically mentioned the ramp-up in production of the electric Chevrolet Equinox, while maintaining a cautious yet optimistic approach to electric vehicle (EV) growth, stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Despite earlier commitments, GM acknowledged that it would fall short of its target to produce 1 million electric vehicles in North America by the end of 2025, attributing this setback to a market slowdown. Nevertheless, the company has emphasized a flexible approach to production aimed at meeting demand, with EV sales witnessing growth last quarter.
On the autonomous vehicle front, Barra revealed that Cruise, GM’s self-driving division, is discontinuing its Origin vehicle to focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. This shift comes after Cruise experienced operational setbacks last October, and the transition away from the unique Origin design is expected to ease regulatory concerns while reducing costs.
“Our vision to transform mobility using autonomous technology is unchanged,” Barra asserted, emphasizing Cruise’s commitment to advancing AI in transportation.
Additionally, GM is working to restructure its joint venture in China with SAIC Motor amid ongoing losses that included a $104 million loss in the second quarter. Production cuts of 70% by SAIC-GM have resulted in delivery numbers that are 50% lower than the previous year.
In summary, despite facing challenges in its electric vehicle strategy and international joint ventures, GM’s strong quarterly performance and positive financial outlook signal a resilient path forward as it continues to focus on innovation and market demands.
This news highlights the company’s adaptability and forward-thinking approach, suggesting that, while challenges remain, GM’s strategic shifts could lead to sustainable growth and success in the rapidly evolving automotive landscape.