General Motors has updated its financial targets for 2024 following a strong performance in its second quarter, which exceeded Wall Street’s expectations. The Detroit-based automaker increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from an earlier forecast of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, although it slightly reduced 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, reflecting a growth of over 7% compared to the previous year and surpassing the Wall Street expectation of $45 billion, as per FactSet estimates. The company’s earnings per share were $3.06, exceeding analyst projections of $2.71 and marking a 60% increase from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
GM’s stock surged nearly 5% in pre-market trading on Tuesday and has seen an increase of over 37% this year. Following the market close 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 discussed plans to introduce eight new or redesigned models in North America. She also announced the ramp-up of production for the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in the electric vehicle (EV) sector.
Earlier this month, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. However, the company remains flexible in its production strategy and reported a growth in EV sales last quarter.
Additionally, Barra revealed that Cruise, GM’s autonomous vehicle division, will abandon its plans for the Origin model, which faced regulatory challenges after an incident last October. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the pause in Origin production in Detroit.
During a call with analysts, Barra stated that using the Bolt would address regulatory concerns regarding the distinct design of the Origin, including its lack of a steering wheel. The shift will also help reduce costs and optimize resources.
Barra reaffirmed GM’s vision of transforming mobility through autonomous technology, noting that each mile and simulation brings the company closer to its goals. Furthermore, GM is working to restructure its joint venture with SAIC Motor in China, as it faces losses, including a $104 million loss reported for the second quarter. In June, SAIC-GM significantly scaled back production by 70%, resulting in 26,000 vehicle deliveries, which is 50% lower than the previous year.