General Motors is raising several financial targets for 2024 after exceeding Wall Street’s expectations for the second quarter. The automaker has increased its adjusted earnings forecast 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 raised 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.
In the second quarter, GM reported revenue of $47.9 billion, marking a more than 7% increase compared to the same period last year, and surpassing the $45 billion anticipated by Wall Street analysts, according to FactSet estimates. Earnings per share reached $3.06, exceeding the expected $2.71 per share and representing a 60% increase from 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
In pre-market trading on Tuesday, GM’s stock surged nearly 5%. Shares have increased over 37% this year, and following Monday’s trading session, the company declared a third-quarter cash dividend that provided an additional boost to its stock.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of GM’s gas-powered trucks and SUVs, announcing the launch of eight new or redesigned compact, mid-size, and full-size models in North America. Barra also emphasized GM’s commitment to scaling production of the electric Chevrolet Equinox, stating that while the company is excited about its electric vehicles, it remains focused on disciplined volume growth.
Earlier this month, Barra noted that GM would not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company plans to adapt by “building to demand,” although it did see growth in EV sales last quarter.
Additionally, Barra disclosed that Cruise, GM’s self-driving division, will discontinue its Origin vehicle, opting instead to use the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the suspension of Origin production in Detroit.
During a call with analysts, Barra explained that utilizing the Bolt would address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. She added that this move would reduce costs per unit and help GM optimize its resources.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled and every simulation brings us closer because Cruise is an AI-first company,” Barra stated.
GM is also working on restructuring its joint venture in China with SAIC Motor as it faces ongoing losses, having reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles, which is 50% fewer than the previous year, according to Automotive News.