General Motors has raised its financial targets for 2024 after exceeding Wall Street expectations in its second quarter results.
The Detroit-based automaker increased its projected adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous range 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 attributable to shareholders to between $10 billion and $11.4 billion.
GM reported revenue of $47.9 billion for the second quarter, marking a more than 7% increase compared to the same period last year and surpassing the $45 billion anticipated by analysts. Earnings per share came in at $3.06, exceeding the forecast of $2.71 and reflecting a 60% increase from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM stock surged nearly 5% in pre-market trading on Tuesday, bringing its year-to-date increase to over 37%. The company also announced a cash dividend for the third quarter, which further boosted its stock price.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs. She mentioned the company’s plan to launch eight new or redesigned vehicle models in North America and noted the ramp-up of production for the electric Chevrolet Equinox, emphasizing a commitment to disciplined growth in electric vehicle (EV) production. However, Barra acknowledged that GM will not meet its goal of producing 1 million EVs in North America by the end of 2025 due to a market slowdown, stating that the company will adopt a flexible production approach based on demand.
Additionally, Barra announced that Cruise, GM’s self-driving division, will discontinue its Origin vehicle and instead use the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a halt in production of the Origin due to regulatory concerns regarding its unique design, which lacks a steering wheel. GM recorded a $600 million charge related to the discontinuation of the Origin.
Barra reiterated GM’s commitment to transforming mobility through autonomous technology, stating that every mile and simulation brings Cruise closer to achieving its goals.
Moreover, GM is working to restructure its joint venture with SAIC Motor in China, in response to continued financial losses totaling $104 million for the second quarter. Production cuts by SAIC-GM have led to a 70% reduction in output compared to last year, resulting in the delivery of only 26,000 vehicles.