General Motors is increasing its financial targets for 2024 after surpassing Wall Street’s expectations for its second quarter.
The Detroit automaker has upgraded its expected adjusted earnings for the year to between $13 billion and $15 billion, compared to the previous forecast of $12.5 billion to $14.5 billion. Targets for operating cash flow and earnings per share have also been raised. However, expectations for net income attributable to shareholders were slightly reduced to between $10 billion and $11.4 billion.
Revenue for the second quarter reached $47.9 billion, a more than 7% increase from the previous year and above the $45 billion anticipated by Wall Street, according to FactSet estimates. Earnings per share stood at $3.06, exceeding the $2.71 per share forecasted by analysts and 60% higher than last year. 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 risen more than 37% this year. After trading closed on Monday, GM announced a third-quarter cash dividend, which further boosted the stock.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, adding that the company is launching eight new or redesigned compact, mid-size, and full-size models in North America. Barra also mentioned the scaling up of production for the electric Chevrolet Equinox, stating that while the company is excited about its EVs and early successes, it remains committed to disciplined volume growth.
Earlier this month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. Despite this, GM’s EV sales did grow last quarter, and the company affirmed it will adapt to market demand.
Barra also revealed that Cruise, GM’s self-driving unit, would abandon its Origin vehicle after an operational rollback last October. Cruise will now focus on using the next-generation Chevrolet Bolt while testing its vehicles in Texas and Arizona. GM incurred a $600 million charge related to halting Origin production in Detroit.
During an analyst call, Barra explained that using the Bolt would address regulators’ concerns about the Origin’s unique design, which lacks a steering wheel. She noted this shift would also reduce per unit costs and optimize resources.
“Our vision to transform mobility using autonomous technology remains unchanged, and each mile traveled and simulation brings us closer because Cruise is an AI-first company,” said Barra in a statement.
Additionally, GM is restructuring its joint venture in China with SAIC Motor as it continues to face losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM significantly cut production and delivered 26,000 vehicles, a 50% decrease compared to the previous year, according to Automotive News.