General Motors has announced an increase in several financial targets for 2024 following a strong performance that exceeded Wall Street’s expectations in the second quarter.
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 estimate of $12.5 billion to $14.5 billion. Additionally, GM has increased its projections for operating cash flow and earnings per share. However, the expectation for net income attributable to shareholders has been slightly reduced, now anticipated to be between $10 billion and $11.4 billion, a decrease of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, reflecting over 7% growth from the previous year and surpassing the Wall Street estimate of $45 billion, according to FactSet. The company’s earnings per share stood at $3.06, exceeding analysts’ expectations of $2.71 and marking a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following this news, GM’s stock rose nearly 5% in pre-market trading on Tuesday, and the stock has increased by more than 37% this year. The company also declared a cash dividend for the third quarter, contributing to the stock’s gain.
In a letter to shareholders, CEO Mary Barra praised the success of GM’s gas-powered trucks and SUVs, stating that the company is set to launch eight new or redesigned models across different sizes in North America. She highlighted the progress in scaling production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth despite earlier statements indicating that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown.
Barra also reported that Cruise, GM’s autonomous vehicle division, would abandon plans for its Origin vehicle following a previous operational setback and instead leverage the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM recorded a $600 million charge due to the suspension of Origin production.
During an analyst call, Barra addressed regulatory concerns regarding the Origin’s unconventional design, noting that using the Bolt would help alleviate these issues. She added that this shift would reduce costs per unit and optimize resource allocation.
GM is also working to restructure its joint venture in China with SAIC Motor, facing significant losses, including a $104 million loss in the second quarter. Production cuts at SAIC-GM of 70% have led to a reduction in deliveries, with only 26,000 vehicles sold, which is 50% lower than the previous year.