General Motors has increased several financial targets for 2024 after exceeding Wall Street’s predictions for its second quarter performance. The automaker has raised its expected adjusted earnings for the year to a range of $13 billion to $15 billion, up from an earlier projection of $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share, while reducing expectations for net income attributable to shareholders by less than 1%, now estimated between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, reflecting a more than 7% increase from the previous year and surpassing Wall Street’s expectations of $45 billion, according to FactSet estimates. Earnings per share reached $3.06, exceeding the analysts’ forecast of $2.71 per share and marking a 60% increase from 2023. The company’s net income rose by 14% to $2.9 billion, compared to $2.5 billion in the same period last year.
In pre-market trading, GM stock surged nearly 5%, bringing its year-to-date increase to over 37%. Following the trading session on Monday, GM announced a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the strong performance of the company’s gas-powered trucks and SUVs and mentioned plans to launch eight new or redesigned models in North America. Barra emphasized that GM is increasing production of the electric Chevrolet Equinox and reiterated the company’s commitment to disciplined volume growth despite early successes in the EV market.
However, GM acknowledged it would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a slowdown in the market. The company stated it would adapt its production to meet demand, although EV sales have shown growth in the last quarter.
Barra also revealed that Cruise, GM’s self-driving unit, would discontinue its Origin vehicle and shift focus to the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a production halt of the Origin after an incident last year, resulting in a $600 million charge for GM.
During an analyst call, Barra noted that using the Bolt addresses regulatory concerns regarding the Origin’s distinctive design, such as its lack of a steering wheel. This change is expected to lower per-unit costs and improve resource allocation.
GM is also restructuring its joint venture in China with SAIC Motor, as it continues to report losses, including a $104 million loss for the second quarter. In June, SAIC-GM cut production by 70%, delivering 26,000 vehicles, which is a 50% decrease compared to the previous year, according to Automotive News.