General Motors is adjusting its financial targets for 2024 following a strong performance in the second quarter, which exceeded Wall Street’s expectations. The automaker has increased 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, it raised its targets for operating cash flow and earnings per share, while slightly decreasing the expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In 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 forecast by analysts. Earnings per share were reported at $3.06, exceeding the expected $2.71 and reflecting a 60% increase over last year. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
Following this news, GM’s stock jumped nearly 5% in pre-market trading and has risen over 37% this year. The company also announced a third-quarter cash dividend, supporting its stock price.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gasoline-powered trucks and SUVs and mentioned the impending launch of eight new or redesigned vehicle models across various categories in North America. Barra also emphasized the scaling of production for the electric Chevrolet Equinox, reaffirming the company’s commitment to a balanced and disciplined approach to growth in electric vehicle production.
Earlier this month, Barra acknowledged that GM would 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. However, she pointed out that demand for electric vehicles had grown in the last quarter, and GM plans to adapt its production to market needs.
Additionally, Barra announced changes in Cruise, GM’s self-driving unit that had previously scaled back operations after an incident last October. Cruise will abandon its Origin vehicle design in favor of using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the cessation of Origin production.
During an analyst call, Barra indicated that utilizing the Bolt could mitigate regulatory concerns associated with the Origin’s unconventional design, such as its lack of a steering wheel. This shift is also expected to streamline costs and optimize resources.
Moreover, GM is working on restructuring its joint venture with SAIC Motor in China, where it has experienced ongoing losses, reporting a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70% and sold 26,000 vehicles, which was a 50% decrease compared to the previous year.