General Motors has raised its financial targets for 2024 following strong second-quarter results that exceeded Wall Street predictions. The Detroit-based automaker now expects adjusted earnings for the year to range between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, it has adjusted its targets for operating cash flow and earnings per share, while net income expectations for shareholders saw a minor decrease of less than 1%, projected between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, a rise of over 7% from the same period last year and surpassing Wall Street’s forecast of $45 billion, according to FactSet. Earnings per share came in at $3.06, exceeding the expected $2.71 and reflecting a 60% increase from 2023. Net income grew by 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock rose nearly 5% in pre-market trading, and it has seen an overall increase of more than 37% this year. After market closure on Monday, GM declared a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gasoline-powered trucks and SUVs and announced plans to launch eight new or redesigned models in North America. Barra emphasized that GM is actively increasing production of the electric Chevrolet Equinox while remaining committed to disciplined growth in electric vehicle (EV) production.
However, Barra admitted earlier this month that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025, citing a slowdown in the market. The company plans to adapt to demand despite a noted increase in EV sales last quarter.
Barra also revealed that Cruise, GM’s autonomous vehicle division, would discontinue the Origin vehicle model and instead focus on the next-generation Chevrolet Bolt for its tests in Texas and Arizona. This shift follows a $600 million charge related to halting production of the Origin in Detroit.
During an analyst call, Barra explained that using the Bolt would mitigate regulatory concerns about the Origin’s unconventional design, which lacks a steering wheel, and would also reduce costs per unit while optimizing resources.
“Our vision to transform mobility using autonomous technology remains intact, and every mile and simulation brings us closer, as Cruise operates as an AI-first company,” Barra stated.
Additionally, GM is working on restructuring its joint venture with SAIC Motor in China after incurring a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, which is 50% lower than the previous year, as reported by Automotive News.