General Motors has updated its financial targets for 2024 following a significant performance in the second quarter, which exceeded Wall Street predictions.
The Detroit-based automaker raised its forecast for adjusted earnings to between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. In addition, GM adjusted its expectations for operating cash flow and earnings per share. However, the projected net income attributable to shareholders was slightly reduced by less than 1%, now estimated between $10 billion and $11.4 billion.
For the second quarter, GM reported revenues of $47.9 billion, marking a more than 7% increase compared to the same period last year, and surpassing Wall Street’s expectation of $45 billion, according to FactSet data. Earnings per share were recorded at $3.06, exceeding the analyst expectation of $2.71, and representing a 60% increase from 2023. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
As a result, GM’s stock surged nearly 5% in pre-market trading on Tuesday, contributing to a year-to-date increase of over 37%. Following the close of trading 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 celebrated the strong performance of its gasoline-powered trucks and SUVs while detailing plans to launch eight new or redesigned compact, mid-size, and full-size models in North America. Barra emphasized GM’s commitment to scaling the production of the electric Chevrolet Equinox, stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Earlier this month, Barra acknowledged that GM would not achieve its target of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. The company plans to be flexible and “build to demand,” although it did experience growth in EV sales during the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, will discontinue its Origin vehicle project, which faced setbacks following an incident last October. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge connected to the halt of Origin production in Detroit.
During an analysts’ call, Barra explained that the decision to shift to the Bolt would address regulatory concerns regarding the Origin’s distinctive design features, such as the absence of a steering wheel. This change will also help reduce unit costs and streamline resource allocation, she noted.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” Barra stated.
Lastly, GM is working to restructure its joint venture with SAIC Motor in China as it continues to face losses, posting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles—50% fewer than the same month a year prior, according to Automotive News.