General Motors has raised its financial targets for 2024 after significantly exceeding Wall Street’s expectations for its second quarter. The Detroit-based automaker has adjusted its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. It has also raised its targets for operating cash flow and earnings per share, while slightly lowering expectations for net income attributable to shareholders by less than 1%, now forecasting between $10 billion and $11.4 billion.
In its second quarter report, GM reported revenue of $47.9 billion, representing a more than 7% increase over the same period last year and surpassing Wall Street’s $45 billion expectation, according to FactSet estimates. Earnings per share reached $3.06, exceeding analyst predictions of $2.71 and marking a 60% increase from 2023. Net income rose by 14% to $2.9 billion, compared to $2.5 billion last year.
Following the announcement, GM’s stock saw a nearly 5% rise in pre-market trading on Tuesday, contributing to a year-to-date gain of over 37%. Additionally, GM declared a third-quarter cash dividend, which positively impacted the stock.
In a letter to shareholders, CEO Mary Barra highlighted the company’s success with gas-powered trucks and SUVs and mentioned the plan to introduce eight new or redesigned models in North America. She also noted GM’s efforts to increase production of the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in electric vehicle production.
Earlier this month, Barra indicated that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, attributing the delay to a market slowdown. Despite this, EV sales did see an uptick last quarter.
Barra also revealed that GM’s self-driving unit, Cruise, will discontinue its Origin vehicle following a temporary halt in operations after an incident last October. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge related to the discontinuation of the Origin production in Detroit.
During a call with analysts, Barra explained that using the Bolt will address regulatory concerns regarding the unique design of the Origin, which lacked a steering wheel. This change is also expected to reduce costs per unit and allow GM to better allocate resources.
Barra reaffirmed GM’s vision to transform mobility with autonomous technology, stating that each mile and simulation advances their goals as Cruise focuses on being an AI-first company.
Additionally, GM is restructuring its joint venture with SAIC Motor in China, grappling with ongoing losses, including a $104 million loss reported in the second quarter. In June, SAIC-GM significantly cut production by 70%, delivering 26,000 vehicles, which is 50% fewer than the same period last year.