General Motors has announced an increase in several financial targets for 2024 after exceeding Wall Street’s expectations during 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 forecast of $12.5 billion to $14.5 billion. Additionally, GM has adjusted its targets for operating cash flow and earnings per share, although it slightly lowered its expectations for net income attributable to shareholders, now estimating it will be between $10 billion and $11.4 billion, a decrease of less than 1%.
In the second quarter, GM reported revenues of $47.9 billion, marking a more than 7% increase from the previous year and surpassing Wall Street’s expectations of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, exceeding analysts’ predictions of $2.71 and reflecting a 60% increase compared to 2023. The company’s net income rose by 14%, reaching $2.9 billion, compared to $2.5 billion the previous year.
Following these results, GM stocks experienced an almost 5% rise in pre-market trading on Tuesday, with a total increase of over 37% for the year. Additionally, the company declared a third-quarter cash dividend, which contributed to the stock’s positive movement.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs, stating that the company is set to launch eight new or redesigned models in North America. She also mentioned the ramp-up in production of the electric Chevrolet Equinox, while expressing commitment to “disciplined volume growth” despite a recent statement that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns. Nonetheless, the company reported growth in its EV sales in the last quarter.
Moreover, Barra announced a strategic shift for GM’s self-driving unit, Cruise, which will no longer pursue production of its Origin vehicle but will focus on utilizing the next-generation Chevrolet Bolt in vehicle tests in Texas and Arizona. This decision comes after Cruise had to scale back operations due to an incident last October, leading to a $600 million charge associated with ceasing the production of the Origin in Detroit.
During a call with analysts, Barra emphasized that the decision to use the Bolt aims to address regulatory concerns regarding the Origin’s unique design, which lacked a steering wheel. She also noted that this change would reduce unit costs and optimize resources for GM.
Lastly, GM is working to restructure its joint venture with SAIC Motor in China, which continues to face financial challenges, posting a loss of $104 million in the second quarter. In June, SAIC-GM reduced production by 70% and delivered only 26,000 vehicles, a 50% decline from the previous year, as reported by Automotive News.