General Motors has announced a revision of its financial targets for 2024, surpassing Wall Street expectations during the second quarter. The 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. There are also increases in expectations for operating cash flow and earnings per share, although net income attributable to shareholders was adjusted downward by less than 1%, now estimated between $10 billion and $11.4 billion.
In terms of revenue, GM reported $47.9 billion for the second quarter, a more than 7% rise compared to the same period last year and exceeding the anticipated $45 billion according to FactSet estimates. The earnings per share reached $3.06, surpassing analyst predictions of $2.71 and marking a 60% increase from 2023. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
Following the strong performance, GM’s stock surged nearly 5% in pre-market trading on Tuesday, having already increased over 37% this year. After markets closed on Monday, GM also declared a cash dividend for the third quarter, further boosting its stock value.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, while announcing plans to launch eight new or redesigned models in North America. She discussed GM’s ongoing ramp-up of production for the electric Chevrolet Equinox and emphasized a commitment to disciplined volume growth, despite acknowledging that the company will not meet its prior target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. Nonetheless, EV sales did see an increase in the last quarter.
Additionally, Barra shared that Cruise, GM’s autonomous vehicle division, will discontinue its Origin vehicle and instead test the next-generation Chevrolet Bolt in Texas and Arizona. This decision follows a production halt for the Origin that incurred a $600 million charge for GM.
In a call with analysts, Barra stated that using the Bolt will address regulatory concerns surrounding the Origin’s distinctive design, which included the absence of a steering wheel. This pivot is also expected to reduce costs per unit and will assist GM in optimizing its resources.
Finally, GM is working to restructure its joint venture with SAIC Motor in China, where it has reported ongoing losses, including a $104 million loss for the second quarter. In June, the joint venture significantly reduced production, resulting in the delivery of only 26,000 vehicles, a 50% decline compared to the previous year.