General Motors has raised several financial targets for 2024 following a strong performance in the second quarter that exceeded Wall Street expectations. The Detroit-based automaker increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM raised its goals 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 reduction of less than 1%.
During the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the prior year and surpassing the $45 billion anticipated by analysts. Earnings per share stood at $3.06, well above the expected $2.71 and representing a 60% increase from the previous year, while net income rose by 14% to $2.9 billion compared to $2.5 billion in 2023.
As a result of the positive financial news, GM’s stock rose nearly 5% in pre-market trading on Tuesday, with the stock increasing over 37% year-to-date. Following the market close on Monday, GM also announced a third-quarter cash dividend, contributing to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, noting the company’s plans to launch eight new or redesigned models in North America, including compact, mid-size, and full-size vehicles. Barra mentioned that GM is ramping up production of the electric Chevrolet Equinox and reiterated the company’s commitment to disciplined growth in the electric vehicle sector despite earlier comments about not reaching the target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. However, EV sales saw growth last quarter.
Barra also announced changes to Cruise, GM’s self-driving unit, which will pivot away from its Origin vehicle model and instead focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. This shift follows a production halt after an incident last October, with GM incurring a $600 million charge due to the cessation of Origin production in Detroit. Barra emphasized that utilizing the Bolt would address regulatory concerns regarding the Origin’s unconventional design.
Furthermore, GM is restructuring its joint venture with SAIC Motor in China amid continuing losses; the company reported a $104 million loss for the second quarter while production at SAIC-GM was cut by 70%, resulting in 26,000 vehicle deliveries, which is 50% less than the previous year.