General Motors has raised its financial targets for 2024 following stronger-than-expected performance in the second quarter, surpassing Wall Street estimates. The company now expects adjusted earnings for the year to range between $13 billion and $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. It also raised its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributed to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the same period last year and exceeding the $45 billion forecast from Wall Street. Earnings per share reached $3.06, surpassing analysts’ expectations of $2.71 and representing a 60% increase compared to 2023. Net income also rose by 14% to $2.9 billion, up from $2.5 billion.
In pre-market trading on Tuesday, GM’s stock rose nearly 5%. The stock has increased more than 37% this year, and after trading ended on Monday, GM announced a third-quarter cash dividend, contributing to the stock’s upswing.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs and mentioned plans to launch eight new or redesigned models across various sizes in North America. She reaffirmed the company’s commitment to discipline in scaling production for the electric Chevrolet Equinox, stating that while they are excited about their electric vehicles, they are committed to managing growth responsibly.
However, Barra acknowledged that GM will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, citing a slowdown in the market. She reiterated GM’s flexible approach to production, adapting to demand, although the company did see an increase in EV sales last quarter.
Barra also announced changes for Cruise, GM’s self-driving division, which will abandon plans for its Origin vehicle in favor of using the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million expense related to the suspension of Origin production in Detroit, and Barra noted that utilizing the Bolt addresses regulatory concerns about the Origin’s unconventional design and helps reduce costs.
“Our vision to transform mobility through autonomous technology remains unchanged, and every mile traveled brings us closer to that goal,” said Barra.
Additionally, GM is looking to restructure its joint venture with SAIC Motor in China, where it has experienced financial losses, including a $104 million loss in the second quarter. Earlier this year, SAIC-GM reduced production by 70%, resulting in the delivery of 26,000 vehicles, which is 50% less than the previous year.