General Motors has raised several financial targets for 2024 after exceeding Wall Street’s expectations in its second-quarter performance.
The Detroit-based automaker has increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from a prior estimate of $12.5 billion to $14.5 billion. Additionally, GM revised its targets for operating cash flow and earnings per share, although expectations for net income attributable to shareholders were slightly lowered by less than 1%, now estimated between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, a more than 7% increase from the previous year and surpassing the $45 billion anticipated by Wall Street, as per FactSet estimates. Earnings per share were recorded at $3.06, exceeding analysts’ expectations of $2.71 and representing a 60% increase from 2023. The net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock price surged nearly 5% in pre-market trading and has increased over 37% this year. On Monday, the company declared a cash dividend for the third quarter, which contributed to the stock’s rise.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, revealing plans to launch eight new or redesigned vehicle models in North America. Barra also discussed the ramp-up of production for the electric Chevrolet Equinox, affirming the company’s commitment to disciplined growth in electric vehicle sales.
Earlier this month, Barra acknowledged that GM would not reach its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing this to a slowdown in the market. The company has stated it will adapt production based on demand, although EV sales showed growth last quarter.
Barra also announced a strategic shift for GM’s autonomous vehicle division, Cruise, which will stop the development of its Origin vehicle following a prior operational rollback. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for vehicle testing in Texas and Arizona. GM has incurred a $600 million charge associated with the stoppage of the Origin’s production in Detroit.
During an analyst call, Barra explained that using the Bolt addresses regulatory concerns regarding the unique design of the Origin, which lacks a steering wheel. This move will help reduce costs per unit and optimize resources.
“Our vision to transform mobility using autonomous technology remains steadfast, and every mile traveled and every simulation brings us closer because Cruise is an AI-first company,” Barra stated.
Moreover, GM is working to restructure its joint venture with SAIC Motor in China, as it continues to face losses, including a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering 26,000 vehicles—50% fewer than the previous year, according to Automotive News.