General Motors has increased several financial targets for 2024 after exceeding Wall Street’s expectations in its second-quarter results.
The Detroit-based automaker has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, compared to the previous projection of $12.5 billion to $14.5 billion. It also raised its estimates for operating cash flow and earnings per share, although the forecast for net income attributable to shareholders was slightly decreased by less than 1%, now estimated between $10 billion and $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, marking over a 7% increase from the previous year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. The company’s earnings per share reached $3.06, exceeding the analysts’ forecast of $2.71 per share and representing a 60% increase from last year. Net income grew 14%, rising to $2.9 billion from $2.5 billion.
Following this announcement, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has increased more than 37% so far this year. After the market closed on Monday, GM declared a cash dividend for the third quarter, contributing to the stock’s surge.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She mentioned that the company is launching eight new or redesigned compact, mid-size, and full-size models in North America. Barra also emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox, stating that while the company is enthusiastic about its electric vehicles (EVs) and early successes, it remains committed to disciplined growth in volume.
Earlier this month, Barra acknowledged 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 has pledged to remain flexible and “build to demand,” even though its EV sales increased in the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving unit, will abandon its Origin vehicle plans after a rollback of its operations following an incident last year. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the halt in Origin production in Detroit.
During a call with analysts, Barra said that switching to the Bolt would address any regulatory concerns related to the Origin’s unique design, such as its absence of a steering wheel. This transition is expected to reduce per unit costs and help GM better allocate its resources.
Barra reaffirmed GM’s vision to transform mobility through autonomous technology, noting that every mile traveled and each simulation brings the company closer to its goals, as Cruise continues to position itself as an AI-centric entity.
GM is also working to restructure its joint venture in China with SAIC Motor amid ongoing losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, which is a 50% decrease from the previous year, according to Automotive News.