General Motors has increased several financial targets for 2024 following a strong performance that exceeded Wall Street’s expectations for its second quarter.
The Detroit-based automaker revised its projected 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 raised its targets for operating cash flow and earnings per share. However, expectations for net income attributed to shareholders were slightly lowered by less than 1%, now estimated to be between $10 billion and $11.4 billion.
In terms of revenue, GM reported $47.9 billion for the second quarter, representing a more than 7% increase compared to the prior year and surpassing Wall Street’s expectation of $45 billion based on FactSet estimates. Earnings per share were reported at $3.06, exceeding the $2.71 anticipated by analysts and showing a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following this news, GM’s stock rose nearly 5% in pre-market trading on Tuesday, with a total increase of over 37% this year. The company also declared a third-quarter cash dividend after market close on Monday, further lifting the stock.
In a message to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and noted the ongoing launch of eight new or redesigned models in North America. She emphasized the ramp-up of electric vehicle production, particularly the Chevrolet Equinox, while reinforcing that the company is focused on disciplined growth despite previous comments suggesting a delay in achieving the goal of producing 1 million electric vehicles in North America by the end of 2025 due to market conditions. Nonetheless, GM reported a rise in EV sales in the last quarter.
Barra also shared plans regarding Cruise, GM’s autonomous driving division, which recently had to scale back its operations after an incident last October. The unit will discontinue its Origin vehicle and instead utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a charge of $600 million related to the halt in Origin production.
During an analyst conference call, Barra stated that using the Chevrolet Bolt would address regulatory concerns regarding the Origin’s unconventional design, which lacked a steering wheel. This shift is expected to reduce costs per unit and improve resource allocation.
GM, meanwhile, is working on restructuring its joint venture with SAIC Motor in China, where it has been facing losses, including a reported $104 million loss for the second quarter. In June, SAIC-GM cut production by 70%, delivering 26,000 vehicles—50% less than the same period last year, as per Automotive News.