General Motors is adjusting its financial targets for 2024 after exceeding Wall Street’s forecasts for its second quarter. The automaker has raised 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, while also increasing targets for operating cash flow and earnings per share. However, expectations for net income attributable to shareholders have been slightly lowered to between $10 billion and $11.4 billion, a decline of less than 1%.
In its second quarter, GM reported revenue of $47.9 billion, which is over a 7% increase from the previous year and surpasses Wall Street’s anticipated $45 billion, according to FactSet estimates. The company’s earnings per share for the quarter were $3.06, exceeding the expected $2.71 and reflecting a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM shares surged nearly 5% in pre-market trading on Tuesday, marking a 37% increase for the year. Additionally, GM announced a cash dividend for the third quarter, which provided further support to its stock.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned that the company plans to launch eight new or redesigned models across various sizes in North America. She also noted the scaling of production for the electric Chevrolet Equinox, emphasizing a commitment to disciplined volume growth despite challenges in the electric vehicle market.
Earlier this month, Barra indicated 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 is committed to being flexible and building to demand, although it did see growth in EV sales last quarter.
Additionally, Barra addressed changes within GM’s self-driving unit, Cruise, which has modified its strategy after pausing operations last October. Cruise will abandon its Origin vehicle in favor of using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a $600 million charge related to halting the Origin’s production in Detroit. Barra stated that this shift would help mitigate regulatory concerns regarding the Origin’s design and also reduce costs.
GM is also working to restructure its partnership with SAIC Motor in China, where it has faced significant losses, including a $104 million loss in the second quarter. Production cuts of 70% at SAIC-GM resulted in just 26,000 vehicle deliveries, a drop of 50% compared to the previous year, as reported by Automotive News.