General Motors has updated its financial targets for 2024 following a strong performance that exceeded Wall Street predictions in the second quarter. The Detroit-based automaker has increased its expected adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. GM has also raised its targets for operating cash flow and earnings per share, although it slightly lowered its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion, a reduction of less than 1%.
For the second quarter, GM reported revenues of $47.9 billion, which is over a 7% rise from the same period last year and surpasses Wall Street’s expectation of $45 billion, according to FactSet estimates. The company achieved earnings per share of $3.06, exceeding analysts’ expectations of $2.71 and showing a 60% increase compared to 2023. Additionally, net income rose 14% to $2.9 billion, up from $2.5 billion.
As a result of these strong financial results, GM’s stock surged nearly 5% in pre-market trading on Tuesday and has increased more than 37% year-to-date. Following the close of trading on Monday, GM announced a cash dividend for the third quarter, contributing to the stock’s upward trajectory.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gasoline-powered trucks and SUVs, mentioning that the company plans to launch eight new or redesigned models across various sizes in North America. She also noted the ramp-up in production of the electric Chevrolet Equinox, emphasizing commitment to disciplined growth in electric vehicle production despite earlier comments suggesting GM may not reach its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns.
Additionally, Barra mentioned that Cruise, GM’s autonomous driving unit, would no longer pursue the Origin vehicle, which was halted after operational issues last October. Instead, Cruise will focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the suspension of the Origin’s production in Detroit.
During an analyst call, Barra expressed that utilizing the Bolt would help alleviate regulatory concerns surrounding the Origin’s distinctive design, which lacks a steering wheel. This pivot is expected to reduce costs per unit and optimize resources for GM’s operations.
The automaker is also working to restructure its joint venture in China with SAIC Motor, facing ongoing losses. For the second quarter, GM reported a $104 million loss associated with this partnership. In June, SAIC-GM significantly cut production by 70% and delivered only 26,000 vehicles, a 50% reduction compared to the previous year, according to reports.