General Motors is increasing its financial targets for 2024 following strong second-quarter results that surpassed Wall Street predictions.
The automaker revised its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from an earlier estimate of $12.5 billion to $14.5 billion. Additionally, GM updated its targets for operating cash flow and earnings per share, although it slightly reduced its expectations 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 an increase of over 7% from the previous year and exceeding Wall Street’s estimate of $45 billion. Earnings per share reached $3.06, significantly above the expected $2.71 and representing a 60% increase from 2023. The company’s net income rose by 14% to $2.9 billion, compared to $2.5 billion a year earlier.
In pre-market trading on Tuesday, GM’s stock surged nearly 5%, continuing a year-long increase of over 37%. The company also announced a cash dividend for the third quarter, further enhancing investor confidence.
CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs in a letter to shareholders. She noted that the company plans to introduce eight new or reimagined models across compact, mid-size, and full-size categories in North America. Barra emphasized the ramp-up of production for the electric Chevrolet Equinox, stating that while GM is excited about its electric vehicle (EV) initiatives, it remains committed to disciplined growth.
Earlier this month, Barra acknowledged that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The company intends to remain adaptable and will “build to demand,” although its EV sales did see an increase last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, would discontinue its Origin vehicle model. Instead, Cruise will employ the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to halting production of the Origin in Detroit.
Barra indicated that utilizing the Bolt would address regulatory concerns associated with the Origin’s distinct design and would reduce per-unit costs, allowing GM to optimize its resources.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” Barra remarked.
Furthermore, GM is restructuring its joint venture in China with SAIC Motor due to ongoing losses, reporting a $104 million loss for the second quarter. Following a significant reduction in production in June, SAIC-GM delivered only 26,000 vehicles, which is 50% less than the previous year.