General Motors has announced an increase in its financial targets for 2024 after significantly surpassing Wall Street’s expectations for the second quarter. The automaker has raised its projected adjusted earnings for the year to between $13 billion and $15 billion, up from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has updated its targets for operating cash flow and earnings per share, while expectations for net income attributable to shareholders have been slightly decreased to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, which represents a more than 7% increase from the previous year and exceeds Wall Street’s anticipated $45 billion, according to FactSet estimates. The company’s earnings per share stood at $3.06, surpassing analysts’ expectations of $2.71 and marking a 60% increase compared to 2023. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
Following this positive performance, GM’s stock saw a nearly 5% jump in pre-market trading on Tuesday, contributing to a more than 37% increase in stock price this year. Additionally, GM declared a cash dividend for the third quarter, which further boosted investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of GM’s gas-powered trucks and SUVs and mentioned that the company is in the process of launching eight new or redesigned models in North America. She also emphasized progress in the production of the electric Chevrolet Equinox, stating that the company is committed to disciplined volume growth while remaining enthusiastic about its electric vehicles (EVs).
However, Barra previously indicated that GM will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company plans to adapt its production based on demand, although it did report growth in EV sales in the last quarter.
In a notable shift regarding its self-driving unit, Cruise, Barra announced that the company will discontinue the production of its Origin vehicle, which had faced operational setbacks. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing purposes in Texas and Arizona, which is expected to mitigate regulatory concerns related to the Origin’s unconventional design. This change is anticipated to reduce costs per unit and enhance resource optimization.
Barra reiterated GM’s commitment to transforming mobility through autonomous technology, asserting that each simulation and mile driven brings the company closer to its goals, emphasizing Cruise’s focus as an AI-first company.
Additionally, GM is working to restructure its joint venture with SAIC Motor in China, where it has been facing losses, including a reported $104 million loss in the second quarter. Production cuts in June led to a 70% reduction in output, resulting in only 26,000 vehicles delivered, representing a 50% decline from the previous year, according to Automotive News.