General Motors has announced an increase in its financial targets for 2024 following results that significantly exceeded Wall Street expectations for the second quarter.
The Detroit-based automaker has raised its projected adjusted earnings for the year to between $13 billion and $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM increased its targets for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders was slightly lowered by less than 1%, now estimated to be between $10 billion and $11.4 billion.
In its second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the previous year and surpassing Wall Street’s expectation of $45 billion, according to FactSet. Earnings per share reached $3.06, exceeding the anticipated $2.71 and representing a 60% increase from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
As a result of the positive earnings report, GM stock rose nearly 5% in pre-market trading on Tuesday, bringing the stock’s increase to more than 37% for the year. Following trading on Monday, GM also announced a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs and mentioned plans to launch eight new or redesigned vehicle models in North America. Barra also noted that GM is ramping up production of the electric Chevrolet Equinox, emphasizing a 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. The company stated its intention to remain flexible and produce based on demand, although its EV sales saw growth last quarter.
Additionally, Barra announced a strategic shift for Cruise, GM’s self-driving unit. Following a pause in operations due to an incident last October, Cruise will abandon its Origin vehicle and instead focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the discontinuation of the Origin’s production in Detroit.
During a recent analyst call, Barra explained that using the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. This change is expected to reduce costs per unit and optimize resources for GM.
“Our vision to transform mobility with autonomous technology remains unchanged, and every mile and simulation brings us closer, as Cruise is an AI-first company,” Barra stated.
Moreover, GM is working to restructure its joint venture with SAIC Motor in China due to ongoing losses. The company reported a $104 million loss for the second quarter as SAIC-GM drastically reduced production by 70%, delivering 26,000 vehicles — 50% less than the previous year, according to Automotive News.