General Motors has revised its financial targets for 2024 following impressive performance in the second quarter that exceeded Wall Street expectations. The Detroit-based automaker has increased its projected adjusted earnings for the year to between $13 billion and $15 billion, up from an earlier estimate of $12.5 billion to $14.5 billion. Additionally, GM raised its projections for operating cash flow and earnings per share, although it slightly lowered its expectations for net income attributable to shareholders by less than 1%, now estimating between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, reflecting over a 7% increase compared to the previous year and surpassing Wall Street’s expectation of $45 billion, as per FactSet estimates. The earnings per share stood at $3.06, exceeding the forecasted $2.71 and marking a 60% increase from 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
In early trading on Tuesday, GM’s stock surged nearly 5%, with an overall increase of over 37% this year. Following the close of trading on Monday, GM announced a third-quarter cash dividend, contributing to the stock’s rise.
CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs in a letter to shareholders. She mentioned the company’s plan to launch eight new or redesigned models in North America, focusing on compact, mid-size, and full-size vehicles. Barra also emphasized the scaling production of the electric Chevrolet Equinox, indicating a commitment to disciplined volume growth despite earlier comments that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. However, EV sales did see growth during the last quarter.
In a shift for GM’s self-driving unit Cruise, Barra announced the decision to abandon the Origin vehicle, which faced setbacks after an incident last October. Instead, Cruise will focus on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM has incurred a $600 million charge related to the cessation of Origin production in Detroit. Barra explained that utilizing the Bolt would address regulatory concerns regarding the unique design of the Origin and would help reduce per-unit costs, optimizing resources.
Barra stated, “Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company.”
Moreover, GM is working to restructure its joint venture with SAIC Motor in China as it continues to face losses, having reported a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering just 26,000 vehicles, which is down 50% compared to the same period last year.