General Motors has raised its financial targets for 2024 after exceeding Wall Street’s expectations in its second quarter earnings report. The Detroit-based automaker now expects adjusted earnings for the year to range between $13 billion and $15 billion, an increase from previous estimates of $12.5 billion to $14.5 billion. The company also revised its targets for operating cash flow and earnings per share, while slightly adjusting its net income forecast to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, which reflects a more than 7% increase from the previous year and surpasses Wall Street’s forecast of $45 billion. Earnings per share reached $3.06, exceeding the anticipated $2.71 per share and marking a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result of the strong earnings, GM’s stock saw an almost 5% rise in pre-market trading on Tuesday. The stock has increased over 37% this year, further boosted by a third-quarter cash dividend declared by GM after Monday’s trading session.
In a shareholder letter, CEO Mary Barra highlighted the robust performance of GM’s gasoline-powered trucks and SUVs. She announced that the company is launching eight new or redesigned compact, mid-size, and full-size models in North America and is increasing production of the electric Chevrolet Equinox. Barra emphasized GM’s commitment to disciplined growth in its electric vehicle (EV) segment, despite earlier stating that the company would not meet its goal of producing 1 million EVs in North America by the end of 2025 due to market slowdowns.
Additionally, Barra revealed that Cruise, GM’s self-driving unit, will abandon its Origin vehicle model and instead focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a $600 million charge related to the halt in Origin production.
Barra assured analysts that the shift to using the Bolt would address regulatory concerns about the unique design of the Origin, which notably lacks a steering wheel. She stated that this change would reduce per unit costs and optimize GM’s resources, reinforcing the company’s vision of utilizing autonomous technology to transform mobility.
Moreover, GM is restructuring its joint venture in China with SAIC Motor due to significant losses, reporting a $104 million loss for the second quarter. SAIC-GM reduced production by 70% in June, delivering 26,000 vehicles, which is 50% fewer than the previous year.