General Motors has revised its financial targets for 2024 following stronger-than-expected second-quarter results that exceeded Wall Street forecasts. The company raised its projected adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM updated its expectations for operating cash flow and earnings per share, while slightly lowering the forecast for net income attributable to shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, marking a growth of over 7% from the same period last year and surpassing Wall Street’s expectations of $45 billion, according to FactSet. Earnings per share reached $3.06, exceeding the anticipated $2.71 and representing a 60% increase year-over-year. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has seen a 37% increase this year. The company also declared a cash dividend for the third quarter, enhancing investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs, and revealed plans to launch eight new or redesigned models in North America. She emphasized that while the company is excited about its electric vehicles (EVs), including the Chevrolet Equinox, it is committed to disciplined growth in production.
Earlier this month, Barra indicated that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. However, the company remains flexible to “build to demand,” with an uptick in EV sales reported last quarter.
Barra also shared that GM’s self-driving unit, Cruise, would pivot from its previously planned Origin vehicle to focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a production halt of the Origin, which resulted in a $600 million charge for GM. She noted that using the Bolt would help alleviate regulatory concerns related to the Origin’s unconventional design, while also reducing costs and optimizing resources.
“Our vision to transform mobility using autonomous technology remains intact, and every mile traveled and simulation brings us closer,” Barra stated.
Additionally, GM is working on restructuring its joint venture in China with SAIC Motor, as the partnership continues to face losses, including a $104 million hit in the second quarter. Earlier this year, production was cut by 70%, resulting in only 26,000 vehicle deliveries, a 50% decrease compared to the previous year.