General Motors has raised its financial targets for 2024 following strong performance that exceeded Wall Street’s expectations for the second quarter. The Detroit-based automaker increased 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 revised upwards its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
The revenue for the second quarter reached $47.9 billion, marking a more than 7% increase from the prior year and surpassing Wall Street’s estimate of $45 billion. Earnings per share stood at $3.06, exceeding analyst predictions of $2.71 and representing a 60% increase from the previous year. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following this announcement, GM’s stock saw an almost 5% increase in pre-market trading on Tuesday and has risen over 37% this year. Additionally, GM declared a cash dividend for the third quarter, further boosting its stock value.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gasoline-powered trucks and SUVs. She mentioned that GM is set to launch eight new or redesigned vehicle models in North America. Barra emphasized the scaling production of the electric Chevrolet Equinox and reiterated that while the company is excited about electric vehicles (EVs) and their early successes, it is committed to disciplined growth in volumes.
Earlier in the month, Barra acknowledged that GM is unlikely to meet its ambitious target of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. The company plans to remain flexible and build according to demand, despite an uptick in EV sales last quarter.
In a significant shift, Barra also announced that Cruise, GM’s autonomous vehicle division, will abandon its Origin vehicle program following a setback last October. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes after GM recorded a $600 million charge related to the production halt of the Origin in Detroit.
During a call with analysts, Barra explained that using the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. This pivot is also expected to reduce costs per unit and help GM optimize its resources.
Barra reiterated GM’s commitment to transforming mobility through autonomous technology, stating that every mile traveled and every simulation brings the company closer to this vision, as Cruise operates with an AI-first approach.
Moreover, GM is in the process of restructuring its joint venture with SAIC Motor in China, as it continues to incur losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM scaled back production by 70%, delivering only 26,000 vehicles, which is 50% less than the previous year.