General Motors has raised several financial targets for 2024 after exceeding Wall Street’s expectations for its second-quarter performance. The Detroit-based automaker has adjusted its projected adjusted earnings for the year to range between $13 billion and $15 billion, up from a previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has revised 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.
For the second quarter, GM’s revenue reached $47.9 billion, marking a more than 7% increase from the previous year and surpassing the anticipated $45 billion. Earnings per share stood at $3.06, exceeding the expected $2.71 and reflecting a substantial 60% increase compared to 2023. Net income also grew by 14%, rising to $2.9 billion from $2.5 billion.
Following the announcement, GM’s stock rose nearly 5% in pre-market trading and has seen a year-to-date increase of over 37%. After market close on Monday, GM declared a cash dividend for the third quarter, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the successful sales of the company’s gas-powered trucks and SUVs. She mentioned plans to launch eight new or redesigned models across compact, mid-size, and full-size categories in North America. Barra emphasized the importance of scaling production for the electric Chevrolet Equinox, stating that while the company is enthusiastic about its electric vehicles (EVs), it remains dedicated to disciplined volume growth.
Earlier this month, Barra acknowledged that GM would not meet its target of producing 1 million EVs in North America by the end of 2025 due to a slowdown in the market. The company plans to adopt a flexible production strategy based on demand, although it reported an increase in EV sales in the last quarter.
Barra also indicated that Cruise, GM’s self-driving arm, will discontinue its Origin vehicle following a reduction in operations after an incident last October. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM has taken a $600 million charge related to the halting of Origin production in Detroit.
During a call with analysts, Barra explained that using the Bolt would address any regulatory concerns stemming from the Origin’s unconventional design, such as the absence of a steering wheel. This shift is expected to lower per-unit costs and enhance resource optimization.
“Our vision to transform mobility using autonomous technology is unchanged,” Barra stated. “Every mile traveled and every simulation brings us closer because Cruise is an AI-first company.”
Additionally, GM is in the process of restructuring its joint venture in China with SAIC Motor, as it continues to face losses, including a $104 million loss for the second quarter. In June, SAIC-GM sharply reduced production by 70%, delivering only 26,000 vehicles, which is half the amount delivered a year earlier.