General Motors is increasing its financial targets for 2024 after significantly surpassing Wall Street’s expectations in the second quarter.
The Detroit-based automaker adjusted its expected earnings to between $13 billion and $15 billion for the year, up from the previous forecast of $12.5 billion to $14.5 billion. GM also raised its targets for operating cash flow and earnings per share, though its net income attributable to shareholders was slightly revised down by less than 1% to between $10 billion and $11.4 billion.
For the second quarter, GM reported $47.9 billion in revenue, a more than 7% increase from the previous year and higher than the $45 billion expected by analysts, according to FactSet. Earnings per share were $3.06, exceeding the analyst forecast of $2.71 and 60% higher than 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
GM’s stock surged nearly 5% in pre-market trading on Tuesday and has risen over 37% this year. After markets closed on Monday, GM announced a third-quarter cash dividend, further boosting its stock.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and announced the launch of eight new or redesigned compact, mid-size, and full-size models in North America. She also mentioned that GM is ramping up production of the electric Chevrolet Equinox and is committed to disciplined volume growth despite the excitement around EVs.
Earlier this month, Barra stated that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. GM has indicated it will adapt to market demand, though EV sales did increase last quarter.
Barra also revealed that Cruise, GM’s self-driving unit, will abandon its Origin vehicle and instead use the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision came after a production halt following an incident last October. GM incurred a $600 million charge related to halting the Origin’s production in Detroit.
Switching to the Bolt will address regulatory concerns about the Origin’s unique design, such as its lack of a steering wheel, and reduce per-unit costs, Barra explained in an analyst call.
“Our vision to transform mobility using autonomous technology remains unchanged. Every mile traveled and every simulation brings us closer,” Barra asserted in a statement.
Additionally, GM is working to restructure its joint venture in China with SAIC Motor, after reporting a $104 million loss for the second quarter. In June, SAIC-GM cut production by 70% and delivered 26,000 vehicles, 50% fewer than the previous year, according to Automotive News.