General Motors has announced an increase in its financial targets for 2024 after exceeding Wall Street expectations for the second quarter. The Detroit-based automaker has raised its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has updated its targets for operating cash flow and earnings per share. However, the expectations for net income attributable to shareholders have been slightly reduced by less than 1%, now forecasted to be between $10 billion and $11.4 billion.
GM reported a revenue of $47.9 billion for the second quarter, representing a more than 7% increase compared to the same period last year, and surpassing the Wall Street expectation of $45 billion, according to FactSet estimates. The company’s earnings per share reached $3.06, exceeding analysts’ projections of $2.71 per share and showing a 60% increase from 2023. Net income also rose by 14%, totaling $2.9 billion, up from $2.5 billion.
In pre-market trading on Tuesday, GM’s stock soared nearly 5%, contributing to a more than 37% increase in value this year. Following the close of trading on Monday, GM announced a cash dividend for the upcoming third quarter, further bolstering the stock’s performance.
In her letter to shareholders, CEO Mary Barra highlighted the strong sales of the company’s gas-powered trucks and SUVs, while also mentioning that GM is launching eight new or redesigned compact, mid-size, and full-size models in North America. She expressed enthusiasm over the scaling production of the electric Chevrolet Equinox and affirmed the company’s commitment to disciplined volume growth in the electric vehicle sector. However, Barra noted earlier this month that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. Still, the company is focusing on building vehicles based on demand, and its EV sales did see growth in the last quarter.
Barra also shared updates on Cruise, GM’s autonomous vehicle unit, which had to scale back its operations following an incident last October. Cruise has decided to discontinue its Origin vehicle project and will concentrate on testing the next-generation Chevrolet Bolt in Texas and Arizona. GM incurred a $600 million charge related to halting the production of the Origin in Detroit. During an analysts’ call, Barra explained that utilizing the Bolt would address some regulatory concerns regarding the unique design of the Origin, like its absence of a steering wheel. This shift is expected to lower production costs and optimize resources for the company.
GM is also working to reorganize its joint venture with SAIC Motor in China, where it has been experiencing financial losses, including a $104 million loss in the second quarter. In June, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, which is 50% less than the previous year, according to Automotive News.