General Motors is increasing several financial targets for 2024 after exceeding Wall Street’s expectations for its second quarter results.
The 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. It has also increased its targets for operating cash flow and earnings per share, while slightly lowering the 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, representing a more than 7% increase from the previous year and surpassing the $45 billion anticipated by Wall Street analysts. Earnings per share reached $3.06, exceeding the expected $2.71 and showing a 60% increase compared to 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following these results, GM’s stock jumped nearly 5% in pre-market trading, with a total gain of over 37% this year. The company also declared a third-quarter cash dividend, boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned the company’s plans to launch eight new or redesigned models in North America. She emphasized that while GM is enthusiastic about its electric vehicles (EVs), including the expansion of the electric Chevrolet Equinox, the company is committed to disciplined volume growth.
Earlier, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a market slowdown. The company remains flexible and intends to “build to demand,” even though EV sales increased in the last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving unit that had scaled back its operations following an incident last October, would abandon the Origin vehicle project. Instead, Cruise will utilize the next-generation Chevrolet Bolt for its testing efforts in Texas and Arizona. GM incurred a $600 million charge due to the suspension of Origin production in Detroit.
During a conference call with analysts, Barra explained that the decision to use the Bolt could address regulatory concerns about the Origin’s unconventional design, which lacked a steering wheel. This adjustment is expected to reduce per unit costs and optimize resources for GM.
Barra reiterated that GM’s vision to transform mobility through autonomous technology remains unchanged, as every mile and simulation brings the company closer to its goals, positioning Cruise as an AI-first company.
Moreover, GM is in the process of restructuring its joint venture in China with SAIC Motor, which has been facing financial challenges. The company reported a $104 million loss for the second quarter as SAIC-GM significantly cut production, delivering 50% fewer vehicles than the previous year.