General Motors has revised its financial targets for 2024 following a strong performance in the second quarter that exceeded Wall Street’s expectations.
The Detroit-based automaker has increased its projected adjusted earnings for the year to between $13 billion and $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, while slightly lowering 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 over a 7% increase compared to the same period last year and surpassing Wall Street’s anticipated $45 billion. Earnings per share came in at $3.06, exceeding the $2.71 expected by analysts and representing a 60% increase from 2023. The net income rose by 14% to $2.9 billion, compared to $2.5 billion the previous year.
As a result, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has experienced over a 37% increase year-to-date. Following the market close on Monday, GM announced a third-quarter cash dividend, contributing to the positive momentum.
In communication with shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs. She also mentioned plans for launching eight new or redesigned models in North America, ranging from compact to full-size. Barra confirmed that GM is ramping up production of the electric Chevrolet Equinox, emphasizing their commitment to disciplined growth in the electric vehicle (EV) sector despite a recent slowdown in the market. Earlier this month, she acknowledged that GM will not reach its goal of producing 1 million EVs in North America by the end of 2025 due to this market slowdown, but affirmed that EV sales grew in the last quarter.
Barra also informed analysts that Cruise, GM’s self-driving unit, would discontinue its Origin vehicle after a previous incident last October forced a pause in operations. The focus will shift to the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to halting Origin production in Detroit, but switching to the Bolt is expected to alleviate regulatory concerns regarding the Origin’s unconventional design, such as lacking a steering wheel, and will help reduce costs.
“Our vision to transform mobility through autonomous technology remains steadfast, as every mile traveled and every simulation gets us closer, with Cruise operating as an AI-first company,” Barra stated.
Furthermore, GM is working to restructure its joint venture in China with SAIC Motor, as the company reported a $104 million loss for the second quarter. In June, SAIC-GM slashed production by 70% and delivered 26,000 vehicles, a 50% decrease from the previous year, according to industry reports.