General Motors has announced an increase in several financial targets for 2024 after significantly exceeding Wall Street’s expectations for its second quarter. The Detroit-based automaker raised its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM increased its targets for operating cash flow and earnings per share, while slightly lowering its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
For the second quarter, GM reported revenue of $47.9 billion, which marks more than a 7% increase compared to the previous year and surpasses the Wall Street expectation of $45 billion. Earnings per share stood at $3.06, exceeding analysts’ predictions of $2.71 per share and reflecting a 60% rise compared to 2023. The company’s net income rose by 14%, reaching $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock experienced nearly a 5% increase in pre-market trading, contributing to a year-to-date rise of over 37%. On Monday, GM also declared a third-quarter cash dividend, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra praised the performance of GM’s gas-powered trucks and SUVs. She mentioned that the company is launching eight new or redesigned models in different categories across North America. Barra also indicated that GM is ramping up production of the electric Chevrolet Equinox, affirming their commitment to disciplined growth in electric vehicle (EV) production despite earlier statements suggesting they would not meet their goal of producing 1 million EVs in North America by the end of 2025 due to market slowdowns.
Additionally, Barra confirmed that Cruise, GM’s self-driving subsidiary, will discontinue its Origin vehicle model following a rollback of operations after an incident last October. The company will now focus on utilizing the next-generation Chevrolet Bolt for its tests in Texas and Arizona. GM has incurred a $600 million charge related to the suspension of Origin production in Detroit.
During a conference call with analysts, Barra emphasized that using the Bolt will help address regulatory concerns regarding the unique design of the Origin, which lacks a traditional steering wheel. This shift is expected to reduce unit costs and optimize resources effectively.
Furthermore, GM is working on restructuring its joint venture with SAIC Motor in China, as the partnership continues to experience losses, including a $104 million loss reported for the second quarter. In June, SAIC-GM had to reduce production by 70%, delivering only 26,000 vehicles, which is a 50% drop compared to the previous year.