General Motors has announced an increase in several financial targets for 2024 after exceeding Wall Street’s expectations for its second quarter results.
The Detroit-based automaker has raised its forecast for adjusted earnings for the year to a range between $13 billion and $15 billion, compared to the previous estimate of $12.5 billion to $14.5 billion. Additionally, it has enhanced its targets for operating cash flow and earnings per share. However, the company’s expectations for net income attributable to shareholders were slightly reduced by less than 1%, now anticipated to fall 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 last year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, exceeding the $2.71 analysts had predicted and representing a 60% increase from 2023. The net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has increased over 37% this year. Following the market close on Monday, GM announced a cash dividend for the third quarter, contributing to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of the company’s gas-powered trucks and SUVs, noting that GM is preparing to launch eight new or redesigned compact, mid-size, and full-size vehicles in North America. She also mentioned the ramp-up in production for the electric Chevrolet Equinox, stating the company’s commitment to disciplined volume growth, even as they are excited about their electric vehicle (EV) initiatives and early successes.
Earlier this month, Barra acknowledged that GM is unlikely to meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. The company has plans to be flexible and adapt production to demand, although they did witness growth in EV sales last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, will discontinue its Origin vehicle, opting instead to use the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes after Cruise had to retract its operations following an incident last October and GM recorded a $600 million expense associated with halting Origin’s production in Detroit.
During an analyst call, Barra mentioned that utilizing the Bolt will address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. This shift is expected to reduce costs per unit and enable GM to optimize its resources.
Barra reaffirmed the company’s commitment to transforming mobility through autonomous technology, stating that each mile traveled and simulation brings them closer to their vision, as Cruise continues to operate as an AI-first company.
In another development, GM is working to restructure its joint venture with SAIC Motor in China as it faces ongoing losses, which totaled $104 million in the second quarter. In June, SAIC-GM drastically reduced production by 70%, delivering only 26,000 vehicles—50% less than the same month a year earlier, according to Automotive News.