General Motors has announced an upward revision of its financial targets for 2024 following a strong performance in the second quarter that surpassed Wall Street estimates.
The Detroit-based automaker has adjusted its expected adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. GM also raised its projections for operating cash flow and earnings per share, although the outlook for net income attributable to shareholders was slightly decreased by less than 1%, now estimated to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the same period last year and exceeding Wall Street’s expectations of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, surpassing analysts’ predictions of $2.71 and representing a 60% rise compared to 2023. Net income increased by 14%, totaling $2.9 billion, up from $2.5 billion a year earlier.
Following the announcement, GM’s stock surged nearly 5% in pre-market trading and has risen over 37% this year. Additionally, GM declared a cash dividend for the third quarter, contributing to the stock’s momentum.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of the company’s gas-powered trucks and SUVs and mentioned the launch of eight new or redesigned models across various segments in North America. Barra emphasized the scaling of production for the electric Chevrolet Equinox, stating that while the company is enthusiastic about its electric vehicles (EVs) and early successes, it remains committed to disciplined growth.
Earlier this month, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. However, she noted that the company remains flexible and plans to “build to demand,” despite experiencing growth in EV sales during the last quarter.
Furthermore, Barra announced changes to Cruise, GM’s autonomous vehicle division, which has had to scale back operations after a previous incident. The company will discontinue its Origin vehicle and instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. This shift has led GM to incur a $600 million charge related to the cessation of Origin production in Detroit.
During a call with analysts, Barra stated that utilizing the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacks a steering wheel. This transition is expected to reduce per-unit costs and optimize GM’s resources.
“Our vision to transform mobility through autonomous technology remains steadfast, and with every mile traveled and every simulation completed, we are progressing closer to our goals as Cruise operates as an AI-first company,” Barra remarked.
Additionally, GM is looking to restructure its joint venture in China with SAIC Motor amid ongoing losses, reporting a $104 million loss in the second quarter. In June, SAIC-GM drastically reduced production by 70%, delivering 26,000 vehicles—50% less than the previous year, according to Automotive News.