General Motors has raised its financial targets for 2024 after exceeding Wall Street’s expectations in the second quarter. The Detroit-based automaker increased its projected adjusted earnings for the year to between $13 billion and $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM raised its targets for operating cash flow and earnings per share, although it slightly lowered its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the 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 estimates. Earnings per share reached $3.06, exceeding the predicted $2.71 per share and representing a 60% increase compared to 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion the previous year.
Following these announcements, GM’s stock price surged nearly 5% in pre-market trading. The stock has increased over 37% this year, buoyed further by GM’s declaration of a third-quarter cash dividend after market close on Monday.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She mentioned that the company is launching eight new or redesigned models in North America, including compact, mid-size, and full-size vehicles. Barra emphasized that GM is ramping up production of the electric Chevrolet Equinox, stating that while the company is enthusiastic about its electric vehicles (EVs) and their early success, it is committed to disciplined volume growth.
Earlier this month, Barra indicated that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025, citing a slowdown in the market. The company plans to remain flexible and “build to demand,” although its EV sales did see growth last quarter.
Barra also announced that Cruise, GM’s autonomous vehicle unit, would discontinue its Origin vehicle model, redirecting its focus to the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the halt in production of the Origin in Detroit.
During a call with analysts, Barra explained that using the Bolt would address regulators’ concerns about the Origin’s unique design, which lacked a steering wheel. This shift is expected to reduce per-unit costs and help optimize GM’s resources.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” Barra stated.
Moreover, GM is restructuring its joint venture in China with SAIC Motor, as the company continues to face losses, including a $104 million loss for the second quarter. In June, SAIC-GM cut production by 70%, delivering 26,000 vehicles, which is 50% fewer than the same period last year, as reported by Automotive News.