General Motors has raised its financial targets for 2024 after exceeding Wall Street forecasts for its second-quarter performance. The Detroit automaker has updated its expected 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 has increased its targets for operating cash flow and earnings per share. However, the forecast for net income attributable to shareholders has been slightly reduced by less than 1%, now projected to be between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from a year earlier and surpassing the anticipated $45 billion. Earnings per share rose to $3.06, exceeding the expected $2.71 and representing a 60% increase over last year. Net income climbed 14% to $2.9 billion compared to $2.5 billion in the previous year.
Following the announcement, GM’s stock experienced a nearly 5% increase in pre-market trading, contributing to a year-to-date rise of over 37%. The company also declared a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra emphasized the strong sales of GM’s gas-powered trucks and SUVs. She mentioned the launch of eight new or redesigned models across various categories in North America and highlighted the scaling of production for the electric Chevrolet Equinox. Barra expressed enthusiasm for GM’s electric vehicle (EV) initiatives while maintaining a focus on disciplined growth.
Earlier this 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 slowdown in the market. Nevertheless, the company plans to build based on demand, and EV sales saw an uptick in the last quarter.
Barra also announced a strategic shift for Cruise, GM’s self-driving division, which will discontinue its Origin vehicle model. Instead, Cruise will concentrate on testing next-generation Chevrolet Bolts in Texas and Arizona. GM incurred a $600 million charge related to the halt of Origin production in Detroit, and Barra noted that this change will address regulatory concerns regarding the Origin’s design while reducing costs and optimizing 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 stated.
Additionally, GM is working on restructuring its joint venture with SAIC Motor in China amid ongoing losses, having recorded a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, which is 50% less than the previous year.