General Motors has increased several financial targets for 2024 after exceeding Wall Street’s expectations in its second quarter. The Detroit-based automaker has raised its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, although it slightly lowered its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
Second-quarter revenue reached $47.9 billion, which is over a 7% increase compared to the same period last year and above Wall Street’s expectation of $45 billion. Earnings per share stood at $3.06, surpassing the estimated $2.71 per share and showing a 60% increase from 2023. The net income rose 14%, reaching $2.9 billion, compared to $2.5 billion in the previous year.
Following these announcements, GM’s stock rose nearly 5% in pre-market trading on Tuesday, reflecting a more than 37% increase this year. After the market closed on Monday, GM also announced a cash dividend for the third quarter.
In her letter to shareholders, CEO Mary Barra highlighted the strong sales of its gas-powered trucks and SUVs and indicated plans to launch eight new or redesigned models in North America, including compact and full-size vehicles. She noted that GM is ramping up production of the electric Chevrolet Equinox, emphasizing a commitment to disciplined volume growth despite some setbacks.
Earlier this month, Barra acknowledged that the company would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. She stated that GM would adapt by focusing on “build to demand” strategies, although EV sales did see growth last quarter.
Additionally, Barra revealed that Cruise, GM’s self-driving unit, would stop production of its Origin vehicle and instead concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the discontinuation of the Origin’s production in Detroit. During a conference call with analysts, Barra emphasized that this decision would help address regulatory concerns regarding the Origin’s unconventional design while reducing costs and optimizing resources.
Barra reaffirmed GM’s vision for transforming mobility through autonomous technology, stating that every mile traveled and simulation brings the company closer to its goals. Furthermore, GM is restructuring its joint venture with SAIC Motor in China due to ongoing financial losses, having reported a $104 million loss for the second quarter. Production cuts of 70% at SAIC-GM resulted in the delivery of just 26,000 vehicles, which is 50% lower than the previous year.