General Motors has raised several financial targets for 2024 following impressive second-quarter results that exceeded Wall Street’s expectations.
The automaker has adjusted its anticipated 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, 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, reflecting a more than 7% year-over-year increase and surpassing the projected $45 billion. Earnings per share stood at $3.06, exceeding analysts’ expectations of $2.71 and showing a significant increase of 60% compared to 2023. The net income rose by 14% to reach $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock soared nearly 5% in pre-market trading on Tuesday, contributing to a year-to-date increase of over 37%. The company also declared a third-quarter cash dividend after Monday’s trading close, positively impacting the stock price.
In a letter addressed to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She noted the company is launching eight new or redesigned vehicle models across various sizes in North America. Barra mentioned the scaling up of production for the electric Chevrolet Equinox and affirmed the company’s commitment to disciplined volume growth despite early successes with electric vehicles.
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, attributing this to a slowdown in the market. However, the company remains flexible with production strategy and reported growth in EV sales in the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, will discontinue its Origin vehicle in favor of the next-generation Chevrolet Bolt to conduct tests in Texas and Arizona. GM faced a $600 million charge related to ceasing production of the Origin in Detroit. Barra emphasized that shifting to the Bolt addresses regulatory concerns about the Origin’s unconventional design and reduces costs per unit while optimizing resources.
Barra reiterated GM’s commitment to transforming mobility through autonomous technology, stating that each mile traveled and simulation conducted brings Cruise closer to its objectives.
GM is also working to restructure its joint venture in China with SAIC Motor, which has been incurring losses. The company reported a loss of $104 million in the second quarter. Production at SAIC-GM saw a drastic cut of 70% in June, with only 26,000 vehicles delivered, marking a 50% decline compared to the previous year.