General Motors has raised several financial targets for 2024 after significantly surpassing Wall Street’s expectations for its second quarter performance.
The Detroit-based automaker now expects adjusted earnings for the year to fall between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, it has lifted its targets for operating cash flow and earnings per share, while slightly adjusting down the net income attributable to shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenues of $47.9 billion, reflecting an increase of over 7% compared to the same period last year, surpassing analysts’ expectations of $45 billion, according to FactSet estimates. The company’s earnings per share reached $3.06, well above the anticipated $2.71 and showing a remarkable 60% increase from 2023. Net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
As a result of this strong performance, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to a year-to-date increase of over 37%. After market close on Monday, GM also announced a cash dividend for the third quarter, further supporting its stock price.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, while also noting that GM is in the process of launching eight new or redesigned vehicle models in North America. Barra emphasized that the company is ramping up production of the electric Chevrolet Equinox, stating, “As excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Earlier in the month, Barra indicated 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. However, the company remains flexible and plans to “build to demand,” despite a growth in EV sales in the last quarter.
Barra also revealed that GM’s autonomous vehicle division, Cruise, will discontinue its Origin vehicle after needing to scale back operations following an incident last October. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. The company incurred a $600 million charge related to the discontinuation of the Origin’s production in Detroit.
During a call with analysts, Barra expressed that shifting to the Bolt should address regulatory concerns about the unique design of the Origin, which lacks a traditional steering wheel. This modification is expected to reduce unit costs and help GM better allocate its resources.
“Our vision to transform mobility using autonomous technology is unchanged,” Barra stated. “Every mile traveled and every simulation brings us closer because Cruise is an AI-first company.”
In addition, GM is working to restructure its joint venture with SAIC Motor in China, which has been struggling with losses. The company reported a $104 million loss for the second quarter, and in June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles—50% less than the prior year, according to Automotive News.