General Motors has increased its financial targets for 2024 after exceeding Wall Street’s expectations in its second quarter results. The Detroit-based automaker has raised its projected adjusted earnings for the year to between $13 billion and $15 billion, up from a previous range of $12.5 billion to $14.5 billion. Additionally, it has revised its targets for operating cash flow and earnings per share, while slightly lowering the expected net income for shareholders to between $10 billion and $11.4 billion.
In its second quarter, GM reported revenue of $47.9 billion, representing a more than 7% increase year-over-year and surpassing Wall Street expectations of $45 billion, according to FactSet estimates. The company’s earnings per share also exceeded forecasts, coming in at $3.06 compared to the anticipated $2.71, marking a 60% increase from the same period in 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following these announcements, GM’s stock surged nearly 5% in pre-market trading and has risen over 37% year-to-date. The automaker also declared a third-quarter cash dividend after trading closed on Monday, contributing to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of its gas-powered trucks and SUVs and mentioned that GM is set to introduce eight new or redesigned models across various sizes in North America. She emphasized the company’s commitment to increasing production of the electric Chevrolet Equinox and stressed the importance of disciplined growth despite recent successes in the electric vehicle (EV) market. However, Barra acknowledged challenges in meeting the goal of producing 1 million EVs in North America by the end of 2025 due to a market slowdown, indicating GM’s approach of building vehicles to match consumer demand.
In another development, Barra announced that Cruise, GM’s self-driving unit, will discontinue its Origin vehicle following a rollback of operations after an incident last October. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing its technologies in Texas and Arizona. GM incurred a $600 million charge related to the cessation of Origin production in Detroit. Barra noted that using the Bolt addresses regulatory concerns regarding the unique design of the Origin, such as the absence of a steering wheel, while also lowering costs and optimizing resource allocation.
“Our vision to transform mobility using autonomous technology remains steadfast. Every mile traveled and every simulation brings us closer to our goals, as Cruise operates as an AI-first company,” Barra stated.
Additionally, GM is working on restructuring its joint venture with SAIC Motor in China, as it has been facing losses in that market, reporting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which was 50% less than the same period last year, according to Automotive News.