General Motors is raising its financial targets for 2024 after surpassing Wall Street’s expectations for its second quarter.
The Detroit automaker has increased its expected 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. It has also raised its targets for operating cash flow and earnings per share. However, expectations for net income attributable to shareholders were slightly lowered, to between $10 billion and $11.4 billion.
Revenue for the second quarter reached $47.9 billion, a more than 7% increase compared to the previous year and above Wall Street’s expectation of $45 billion, according to FactSet estimates. Earnings per share were $3.06, surpassing the $2.71 per share predicted by analysts and marking a 60% increase from 2023. Net income grew 14% to $2.9 billion, up from $2.5 billion.
GM stock jumped almost 5% in pre-market trading Tuesday and has climbed more than 37% this year. After trading closed on Monday, GM declared a third-quarter cash dividend, which boosted the stock further.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs. She mentioned that GM is launching eight new or redesigned compact, mid-size, and full-size models in North America. Barra also stated that GM is scaling production of the electric Chevrolet Equinox and is committed to disciplined volume growth for their EVs, despite a market slowdown.
Earlier this month, Barra noted that GM will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, but EV sales did grow last quarter. The CEO also announced that Cruise, GM’s self-driving unit, will shift focus from its Origin vehicle to using the next-generation Chevrolet Bolt. This change comes after an incident last October forced Cruise to rollback operations. GM took a $600 million charge related to the halt in production of the Origin in Detroit.
During a call with analysts, Barra mentioned that using the Bolt would alleviate regulatory concerns about the Origin’s design and help lower costs and optimize resources. “Our vision to transform mobility using autonomous technology is unchanged,” Barra said in a statement.
GM is also restructuring its joint venture in China with SAIC Motor due to ongoing losses. The company reported a $104 million loss for the second quarter. In June, SAIC-GM cut production by 70% and delivered 26,000 vehicles, or 50% less than the year before, according to Automotive News.