General Motors has increased several of its financial targets for 2024 after exceeding Wall Street’s expectations in its second quarter results. The Detroit-based automaker has revised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, a bump from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has raised its projections for operating cash flow and earnings per share, while slightly lowering 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 an increase of over 7% from the previous year and surpassing the Wall Street estimate of $45 billion, according to FactSet. The earnings per share stood at $3.06, exceeding analysts’ predictions of $2.71 per share and reflecting a 60% increase from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following these reports, GM’s stock saw a nearly 5% rise in pre-market trading on Tuesday and has increased by over 37% this year. After the market closed on Monday, GM announced a cash dividend for the third quarter, contributing to the stock’s surge.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs. She indicated that the company is set to launch eight new or reconfigured models in North America, including compact, mid-size, and full-size vehicles. Barra also mentioned the ramp-up of production for the electric Chevrolet Equinox, emphasizing GM’s commitment to disciplined growth alongside its success in electric vehicles.
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, attributing this to a slowdown in the market. Despite this, the automaker’s EV sales experienced growth in the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, would discontinue its Origin vehicle following a halt in operations after an incident last October. Cruise will now focus on utilizing the next-generation Chevrolet Bolt for vehicle testing in Texas and Arizona. This decision led GM to incur a $600 million charge associated with stopping Origin production in Detroit.
During an analyst call, Barra reassured that the transition to using the Bolt would resolve any regulatory concerns regarding the Origin’s distinctive design, which lacks a steering wheel. This shift is expected to reduce per-unit costs and enhance resource optimization.
GM is also working on restructuring its joint venture with SAIC Motor in China, as it continues to face losses, including a $104 million deficit in the second quarter. In June, production at SAIC-GM was cut by 70%, resulting in the delivery of 26,000 vehicles, which is 50% lower than the previous year, according to Automotive News.