General Motors has raised its financial targets for 2024 following a strong second quarter that exceeded Wall Street expectations. The automaker now anticipates adjusted earnings between $13 billion and $15 billion for the year, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its projections for operating cash flow and earnings per share, but slightly lowered its net income forecasts to a range of $10 billion to $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase from the previous year, surpassing the expected $45 billion. Earnings per share reached $3.06, exceeding analysts’ predictions of $2.71 per share, and showing a 60% growth compared to 2023. The company’s net income rose by 14% to $2.9 billion, up from $2.5 billion.
In pre-market trading, GM’s stock increased nearly 5%, and it has gained over 37% this year. Following market closure on Monday, GM announced a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned plans to introduce eight new or redesigned models in North America, covering compact, mid-size, and full-size segments. She also shared updates on the production of the electric Chevrolet Equinox, emphasizing GM’s commitment to disciplined volume growth despite the excitement around electric vehicles.
Earlier this month, Barra acknowledged that GM would miss its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowing market. The company plans to remain flexible and “build to demand,” although it did see growth in EV sales last quarter.
Additionally, Barra announced that Cruise, GM’s autonomous driving division, will discontinue its Origin vehicle and instead focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. A $600 million charge was taken by GM linked to the stoppage of Origin production in Detroit. Barra stated that utilizing the Bolt would address regulatory concerns about the Origin’s unconventional design and help optimize costs.
GM is also working on restructuring its joint venture in China with SAIC Motor as it continues to face losses, reporting a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, which is a 50% decline compared to the previous year.