General Motors has adjusted several of its financial targets for 2024 following a strong performance that exceeded Wall Street expectations in the second quarter. The Detroit-based automaker 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. Additionally, GM has increased its targets for operating cash flow and earnings per share, although expectations for net income attributable to shareholders were slightly reduced to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the previous year and surpassing the $45 billion forecasted by analysts, according to FactSet estimates. Earnings per share came in at $3.06, exceeding the expected $2.71 and representing a 60% increase from 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
Following this news, GM’s stock saw a nearly 5% increase in pre-market trading and has risen over 37% throughout the year. The company also announced a cash dividend for the third quarter, further boosting its stock value.
In a letter addressed to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, noting plans to launch eight new or redesigned compact, mid-size, and full-size models in North America. Barra stated that GM is ramping up production of the electric Chevrolet Equinox and expressed confidence in the company’s electric vehicle (EV) initiatives while maintaining a commitment to disciplined growth.
However, earlier this month, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025, attributing this adjustment to a slowdown in the market. The company has expressed its intent to “build to demand,” despite a rise in EV sales last quarter.
Moreover, Barra announced that Cruise, GM’s self-driving unit, would discontinue its Origin vehicle, which had faced operational challenges following an incident last October. Instead, Cruise will shift its focus to utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. The company incurred a $600 million charge related to the cessation of Origin production in Detroit.
During a call with analysts, Barra explained that using the Bolt would address regulatory concerns associated with the unique design of the Origin, such as its absence of a steering wheel. This shift is expected to reduce per-unit costs and optimize resource allocation.
Barra reaffirmed the company’s commitment to transforming mobility through autonomous technology, emphasizing that every mile traveled and simulation brings Cruise closer to its goal as an AI-driven organization.
In addition, GM is working on restructuring its joint venture with SAIC Motor in China due to ongoing losses, having reported a $104 million loss for the second quarter. Production at SAIC-GM was cut by 70% in June, resulting in the delivery of 26,000 vehicles, a significant drop of 50% compared to the previous year, according to Automotive News.