General Motors has raised several financial targets for 2024 following a stronger-than-expected second quarter, surpassing Wall Street predictions.
The Detroit-based automaker has increased its anticipated adjusted earnings for the year, now projecting between $13 billion and $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, it has raised targets for operating cash flow and earnings per share. The outlook for net income attributable to shareholders was slightly lowered, now expected to fall between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, which marks a more than 7% increase year-over-year and exceeds the $45 billion forecasted by analysts, according to FactSet estimates. Earnings per share reached $3.06, well above the analysts’ expectation of $2.71 and reflecting a 60% increase compared to 2023. The company’s net income also rose by 14% to $2.9 billion, up from $2.5 billion.
In pre-market trading on Tuesday, GM shares surged nearly 5%. The stock has seen an overall rise of more than 37% this year. Following the close of trading on Monday, GM announced a cash dividend for the third quarter, further contributing to the stock’s upward movement.
In a letter to shareholders, CEO Mary Barra highlighted the positive performance of the company’s gas-powered trucks and SUVs. She mentioned plans for launching eight new or redesigned compact, mid-size, and full-size models across North America. Barra also pointed out that GM is ramping up production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in electric vehicle (EV) production despite earlier statements that the goal of manufacturing 1 million electric vehicles by the end of 2025 would not be met due to a slowdown in the market.
Additionally, Barra announced significant changes in GM’s autonomous vehicle strategy. The company will discontinue its Origin self-driving vehicle, pivoting to the next-generation Chevrolet Bolt for testing in Texas and Arizona. This move comes after GM incurred a $600 million charge linked to the halt of Origin production in Detroit. During a call with analysts, Barra stated that utilizing the Bolt would address regulatory concerns regarding the Origin’s unconventional design, such as its absence of a steering wheel, while also improving unit costs.
Barra reaffirmed GM’s commitment to its vision of transforming mobility through autonomous technology, highlighting that each mile driven and every simulation brings the company closer to its goals.
GM is also in the process of restructuring its joint venture with SAIC Motor in China, as it continues to face losses. The company reported a $104 million loss for the second quarter, and in June, SAIC-GM significantly cut production by 70%, delivering only 26,000 vehicles, or 50% less than the previous year.