General Motors has announced an increase in several financial targets for 2024 after significantly outperforming Wall Street predictions during its second quarter. The Detroit-based automaker has raised its projected adjusted earnings for the year to between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has enhanced its targets for operating cash flow and earnings per share, while slightly decreasing its expectations for net income attributable to shareholders by less than 1%, now projected to be between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, which reflects a more than 7% increase from the same period last year and exceeds the $45 billion expected by Wall Street, according to FactSet estimates. The company’s earnings per share stood at $3.06, surpassing analyst expectations of $2.71 per share and showing a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has risen by over 37% this year. Following market close on Monday, GM also announced a cash dividend for the third quarter, contributing to the stock’s momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, noting the company is preparing to launch eight new or redesigned models in North America, ranging from compact to full-size. Barra emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox and stated, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Earlier this month, Barra acknowledged that GM is unlikely to meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. Although the company is adjusting its plans to be more flexible and “build to demand,” it did report a rise in EV sales last quarter.
Additionally, Barra revealed that Cruise, GM’s self-driving unit, will abandon its Origin vehicle after a previous incident led to a rollback in operations. Instead, the focus will shift to utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the cessation of Origin production in Detroit.
During a call with analysts, Barra assured that using the Bolt would address regulatory concerns regarding the Origin’s unconventional design, including its absence of a steering wheel. This shift is expected to reduce costs per unit and optimize resources for the company.
Barra reiterated that GM’s vision for transforming mobility through autonomous technology remains steadfast, stating, “Every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company.”
Furthermore, GM is working to restructure its joint venture with SAIC Motor in China, as it continues to experience losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, resulting in the delivery of only 26,000 vehicles, which is 50% less than the previous year, according to Automotive News.