General Motors has increased its financial targets for 2024 after exceeding Wall Street expectations in the second quarter. The Detroit automaker raised its forecast for adjusted earnings to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM adjusted its targets for operating cash flow and earnings per share, while slightly lowering the expectation for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, marking over a 7% increase from the previous year and exceeding Wall Street’s expectation of $45 billion. Earnings per share were reported at $3.06, surpassing the anticipated $2.71 and reflecting a 60% increase year-over-year. Net income rose by 14% to $2.9 billion, compared to $2.5 billion in the prior year.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading and has increased by over 37% since the start of the year. The company also declared a cash dividend for the third quarter, contributing to the stock’s boost.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned the upcoming launch of eight new or redesigned vehicle models in North America. She emphasized the company’s commitment to disciplined growth in electric vehicle production, specifically noting the scaling up of the Chevrolet Equinox electric model. However, she acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, citing a slowdown in the market.
Barra also announced changes to GM’s self-driving unit, Cruise, which will discontinue its Origin vehicle in favor of using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes after Cruise faced operational setbacks due to a previous incident. GM recorded a $600 million charge related to halting production of the Origin model.
During a call with analysts, Barra reassured stakeholders that Cruise’s commitment to transforming mobility through autonomous technology remains strong. The decision to utilize the Bolt was made to address regulatory concerns and optimize resources.
Additionally, GM is working to restructure its joint venture in China with SAIC Motor, as the company continues to face losses, reporting a $104 million loss in the second quarter. In June, SAIC-GM significantly cut production by 70%, delivering only 26,000 vehicles, which is 50% less than the prior year.