General Motors has increased several financial targets for 2024 following strong performance in its second quarter, which exceeded Wall Street expectations.
The Detroit-based automaker now anticipates adjusted earnings for the year to be in the range of $13 billion to $15 billion, an increase from its previous estimate of $12.5 billion to $14.5 billion. It has also raised projections for operating cash flow and earnings per share, although expectations for net income attributable to shareholders have been slightly reduced by less than 1%, now estimated to be 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 same quarter last year and surpassing Wall Street’s expectation of $45 billion, according to FactSet. Earnings per share reached $3.06, exceeding the $2.71 per share that analysts anticipated and representing a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has gained over 37% since the start of the year. Additionally, GM declared a third-quarter cash dividend, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of the company’s gas-powered trucks and SUVs. She indicated that GM is in the process of launching eight new or redesigned vehicle models across compact, mid-size, and full-size segments in North America. Barra emphasized the company’s commitment to disciplined growth in electric vehicle production, specifically for the Chevrolet Equinox.
Earlier this month, Barra noted that GM will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company plans to “build to demand,” even though EV sales have increased in the last quarter.
Barra also discussed the company’s self-driving unit, Cruise, which had to scale back operations after a prior incident. Cruise will discontinue its Origin vehicle and instead focus on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million expense related to the halt of Origin production in Detroit.
During a call with analysts, Barra suggested that utilizing the Bolt would address regulatory concerns about the Origin’s unconventional design, such as the absence of a steering wheel. This shift is expected to reduce unit costs and optimize GM’s resources.
“Our vision to transform mobility using autonomous technology remains steadfast,” Barra stated. “Every mile traveled and simulation brings us closer, as Cruise positions itself as an AI-first company.”
In its operations, GM is also looking to restructure its joint venture in China with SAIC Motor due to ongoing losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, which is 50% less than the prior year, according to industry reports.