General Motors has announced an increase in several financial targets for 2024 after outperforming Wall Street predictions in its second quarter results.
The Detroit-based automaker has adjusted its expected adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, it has raised its targets for operating cash flow and earnings per share. However, the expectations for net income attributable to shareholders have been slightly reduced by less than 1%, now projected between $10 billion and $11.4 billion.
In terms of quarterly performance, GM reported revenue of $47.9 billion for the second quarter, which represents a more than 7% increase from the same period last year and exceeds Wall Street’s forecast of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, surpassing the analysts’ expectation of $2.71 per share and showing a 60% increase from 2023. The company’s net income also grew by 14%, totaling $2.9 billion compared to $2.5 billion a year ago.
Following the announcement, GM’s stock rose nearly 5% in pre-market trading, adding to its more than 37% gain for the year. Additionally, GM declared a cash dividend for the third quarter after trading closed Monday, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, and revealed plans to launch eight new or redesigned vehicle models in North America. She also confirmed that GM is ramping up production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined volume growth alongside their excitement for electric vehicle (EV) developments.
Earlier, Barra mentioned 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. The automaker stated it will remain flexible and “build to demand,” though it has seen growth in EV sales last quarter.
Furthermore, Barra announced that Cruise, GM’s self-driving division, would halt production of its Origin vehicle and instead focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. The decision came after Cruise was forced to scale back operations following an incident last October. GM incurred a $600 million charge related to the cessation of Origin production in Detroit.
During an analyst call, Barra noted that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as the absence of a steering wheel. This shift is expected to reduce costs per unit and help optimize resources.
Barra reiterated GM’s commitment to transforming mobility through autonomous technology, stating that the company’s focus remains steady in achieving this vision as Cruise continues to advance its AI-driven initiatives.
GM is also in the process of restructuring its joint venture with SAIC Motor in China due to ongoing financial losses, with the company reporting a $104 million loss for the second quarter. In June, production at SAIC-GM was reduced by 70%, resulting in the delivery of 26,000 vehicles, which is 50% fewer than the previous year.