General Motors has adjusted its financial targets for 2024 upward following impressive results that exceeded Wall Street’s expectations for its second quarter. The Detroit-based automaker now projects its adjusted earnings for the year to be between $13 billion and $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. It also raised targets for operating cash flow and earnings per share, while slightly lowering the expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM’s revenue reached $47.9 billion, reflecting more than a 7% increase year-over-year and surpassing Wall Street’s expectation of $45 billion, according to FactSet. Earnings per share were reported at $3.06, exceeding the anticipated $2.71 and marking a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
As a result, GM’s stock experienced a rise of nearly 5% in pre-market trading on Tuesday and has gained over 37% in value this year. After the market closed on Monday, GM announced a cash dividend for the third quarter, further positively impacting the stock.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, while mentioning plans to introduce eight new or redesigned models in North America. She also discussed the scaling of production of the electric Chevrolet Equinox, emphasizing a commitment to disciplined growth in electric vehicle (EV) production despite earlier statements indicating that GM would not meet its goal of producing 1 million EVs in North America by late 2025 due to a market slowdown.
Additionally, Barra announced changes for Cruise, GM’s self-driving unit, stating that it will discontinue the Origin vehicle following an operational rollback last October. Instead, Cruise will utilize the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge regarding the halt of Origin production in Detroit. Barra noted that this switch would address regulatory concerns associated with the Origin’s unconventional design and improve cost efficiency.
Furthermore, GM is working on restructuring its joint venture with SAIC Motor in China, where it reported a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is 50% less than the previous year.