General Motors has raised its financial targets for 2024 after outperforming Wall Street’s expectations in the second quarter. The Detroit-based automaker has adjusted its expected adjusted earnings for the year to between $13 billion and $15 billion, up from a previous range of $12.5 billion to $14.5 billion. Additionally, GM has increased its targets for operating cash flow and earnings per share. However, it has slightly lowered its expectations for net income attributable to shareholders to a range of $10 billion to $11.4 billion, a decrease of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase from the previous year and surpassing Wall Street’s anticipated $45 billion, based on FactSet estimates. Earnings per share reached $3.06, exceeding the expected $2.71 and representing a 60% increase compared to 2023. The company also saw a 14% rise in net income, reaching $2.9 billion, up from $2.5 billion.
Following this news, GM shares rose nearly 5% in pre-market trading on Tuesday, bringing the stock’s increase for the year to more than 37%. Additionally, after the market closed on Monday, GM announced a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of its gas-powered trucks and SUVs, noting that GM is launching eight new or redesigned models across compact, mid-size, and full-size segments in North America. She emphasized the company’s commitment to disciplined growth in its electric vehicle (EV) production, particularly for the electric Chevrolet Equinox, despite an acknowledgment that GM will not meet its goal of producing 1 million EVs in North America by the end of 2025 due to market slowdowns.
Barra also shared news regarding Cruise, GM’s self-driving division, which recently scaled back operations following a previous incident. The division will pivot from the now-discontinued Origin vehicle to focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the halt of the Origin production.
Barra mentioned that this shift would address regulatory concerns regarding the Origin’s distinctive design, such as the absence of a steering wheel, while also reducing per-unit costs and optimizing resources. She reiterated that GM’s vision to revolutionize mobility through autonomous technology remains intact, with every step bringing them closer to that goal.
Furthermore, GM is working to restructure its joint venture with SAIC Motor in China, as it continues to face financial losses, including a $104 million loss for the second quarter. Production cuts were implemented by SAIC-GM, reducing output by 70%, resulting in the delivery of 26,000 vehicles, which is 50% lower than the previous year.