General Motors has raised its financial targets for 2024 following a strong performance in the second quarter, exceeding expectations from Wall Street. The automaker has increased its projected adjusted earnings for the year to between $13 billion and $15 billion, up from the previous range of $12.5 billion to $14.5 billion. Additionally, it has updated its targets for operating cash flow and earnings per share, while slightly reducing the estimate 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 a 7% increase from the previous year and surpassing Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, exceeding the anticipated $2.71 per share, and shown a 60% increase compared to 2023. The company’s net income rose 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock rose nearly 5% in pre-market trading on Tuesday, and it has increased over 37% year-to-date. After the stock market closed on Monday, GM declared a cash dividend for the third quarter, further boosting stock performance.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs. She also mentioned plans to launch eight new or redesigned models across compact, mid-size, and full-size segments in North America. Barra emphasized GM’s commitment to disciplined growth in electric vehicle production, including scaling up output of the electric Chevrolet Equinox. While she previously stated that the company would not meet its target of producing 1 million electric vehicles in North America by 2025 due to market challenges, she noted that EV sales did see growth last quarter.
Barra announced changes in the direction of GM’s self-driving unit, Cruise, which will no longer pursue the development of its Origin vehicle but will shift focus to the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the discontinuation of the Origin’s production in Detroit. Barra expressed that using the Bolt will address regulatory concerns regarding the unique design of the Origin, leading to reduced costs and improved resource management.
Additionally, GM is working to restructure its joint venture in China with SAIC Motor, amidst ongoing financial losses, reporting a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, which is 50% less than the previous year, according to Automotive News.