General Motors has raised several financial targets for 2024 after exceeding Wall Street’s expectations in the second quarter. The Detroit-based automaker increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM adjusted its targets for operating cash flow and earnings per share, while slightly lowering the forecast 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, which represents an over 7% increase from the previous year and surpasses Wall Street’s expectation of $45 billion, according to FactSet. The earnings per share stood at $3.06, exceeding the anticipated $2.71 and marking a 60% increase compared to 2023. Net income climbed 14% to $2.9 billion, compared to $2.5 billion for the same period last year.
In pre-market trading on Tuesday, GM shares rose nearly 5%. The stock has appreciated more than 37% year-to-date. Following the close of trading on Monday, GM announced a cash dividend for the third quarter, providing an additional lift to the stock.
CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs in a letter to shareholders. She shared that the company is in the process of launching eight new or redesigned models across different categories in North America. Barra also mentioned that GM is increasing production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in the EV sector.
However, Barra recently acknowledged that GM is unlikely to meet its target of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. The company plans to remain flexible and “build to demand,” despite a noted increase in EV sales last quarter.
Furthermore, Barra announced that Cruise, GM’s autonomous vehicle division, would discontinue its Origin vehicle project, which had seen a reduction in operations after an incident last October. Cruise will instead focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM has incurred a $600 million charge related to ceasing the production of the Origin in Detroit.
During a conference call with analysts, Barra noted that using the Bolt addresses regulatory concerns regarding the Origin’s unconventional design, such as the absence of a steering wheel. This shift is expected to reduce costs per unit and help optimize GM’s resources.
Despite these challenges, Barra affirmed the company’s commitment to transforming mobility through autonomous technology, asserting that every mile and simulation brings them closer to their goals as Cruise operates with an AI-first approach. Additionally, GM is working to restructure its joint venture with SAIC Motor in China as it faces ongoing financial losses, reporting a $104 million loss in the second quarter. In June, production at SAIC-GM was slashed by 70%, resulting in a year-over-year vehicle delivery decrease of 50%.