General Motors has updated its financial targets for 2024 following a strong performance in the second quarter that exceeded Wall Street expectations. The Detroit-based automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up 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.
For the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase year-over-year and surpassing the anticipated $45 billion, according to FactSet estimates. Earnings per share reached $3.06, considerably above the analysts’ expectation of $2.71 and 60% higher than the previous year. Net income also saw a 14% rise, totaling $2.9 billion compared to $2.5 billion in the same period last year.
In reaction to the news, GM’s stock rose nearly 5% in pre-market trading on Tuesday and has increased over 37% since the beginning of the year. Following the market closure on Monday, GM announced a cash dividend for the third quarter, which contributed to the stock’s momentum.
In a letter to shareholders, CEO Mary Barra emphasized the success of the company’s gas-powered trucks and SUVs, highlighting plans to launch eight new or redesigned models across various segments in North America. Barra also mentioned that GM is ramping up production of the electric Chevrolet Equinox, expressing the company’s commitment to “disciplined volume growth” in its electric vehicle segment.
Earlier in the 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. The company plans to remain flexible and produce according to demand, although it experienced growth in EV sales in the last quarter.
Barra also shared that Cruise, GM’s autonomous vehicle division, will discontinue its Origin vehicle following a rollback of operations after an incident last October. Instead, Cruise will focus on testing the next-generation Chevrolet Bolt in Texas and Arizona. GM incurred a $600 million charge related to the suspension of Origin production in Detroit.
During a conference call with analysts, Barra noted that utilizing the Bolt would address regulatory concerns regarding the Origin’s unique design, particularly its absence of a steering wheel. This shift is expected to reduce per unit costs and allow GM to optimize its resources.
Barra affirmed the company’s unwavering vision to innovate mobility through autonomous technology, stating that each mile and simulation brings Cruise closer to advancing their goals. Furthermore, GM is working on restructuring its joint venture in China with SAIC Motor as it continues to face financial losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, which is half the amount delivered the previous year, according to Automotive News.