General Motors is raising several financial targets for 2024 after exceeding Wall Street’s expectations in its second quarter.
The Detroit automaker has increased its projected adjusted earnings for the year to between $13 billion and $15 billion, up from its prior estimate of $12.5 billion to $14.5 billion. Additionally, GM has boosted its targets for operating cash flow and earnings per share. The expectation for net income attributable to shareholders was slightly lowered by less than 1%, to between $10 billion and $11.4 billion.
Revenue for the second quarter reached $47.9 billion, which is over 7% higher compared to the previous year and above the $45 billion anticipated by Wall Street, as per FactSet estimates. Earnings per share stood at $3.06, surpassing analysts’ expectations of $2.71 per share 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 climbed more than 37% this year. Following the close of trading on Monday, GM declared a third-quarter cash dividend, contributing to the stock’s rise.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She mentioned that the company is launching eight new or redesigned compact, mid-size, and full-size models in North America. Barra also emphasized that GM is ramping up production of the electric Chevrolet Equinox, asserting that the company remains committed to disciplined volume growth in its electric vehicle (EV) sector.
Earlier this month, Barra admitted that GM will not meet its target of producing 1 million electric vehicles in North America by the end of 2025, citing a market slowdown. Despite this, the company’s EV sales did increase in the last quarter.
Barra also announced changes for Cruise, GM’s self-driving unit. After an incident last October, Cruise was forced to pull back its operations and will now scrap its Origin vehicle. The focus will shift to the next-generation Chevrolet Bolt as the company tests its vehicles in Texas and Arizona. GM recorded a $600 million charge due to halting Origin production in Detroit.
During a call with analysts, Barra explained that using the Bolt will address regulatory concerns about the Origin’s unique design, including the absence of a steering wheel. This change will also reduce per unit costs and help GM optimize its resources.
“Our vision to transform mobility using autonomous technology remains unchanged,” Barra said in a statement. “Every mile traveled and every simulation bring us closer, as Cruise is an AI-first company.”
Additionally, GM is working to restructure its joint venture in China with SAIC Motor amidst ongoing losses. The company reported a $104 million loss for the second quarter. In June, SAIC-GM cut production by 70% and delivered 26,000 vehicles, which is 50% less than the previous year, according to Automotive News.