General Motors has revised its financial targets for 2024 following a strong performance that exceeded Wall Street’s expectations for the second quarter of the year.
The Detroit-based automaker has increased its projected adjusted earnings to between $13 billion and $15 billion, a rise from the previous estimate of $12.5 billion to $14.5 billion. GM also adjusted its forecasts for operating cash flow and earnings per share, while slightly reducing the expectations for net income attributable to shareholders, now estimated between $10 billion and $11.4 billion, a decrease of less than 1%.
In the second quarter, GM reported revenues of $47.9 billion, marking an increase of over 7% from the prior year and surpassing analysts’ expectations of $45 billion, according to FactSet. The company achieved earnings per share of $3.06, exceeding the anticipated $2.71 and representing a 60% increase compared to 2023. Net income rose 14% to $2.9 billion, up from $2.5 billion.
Following this news, GM’s stock rose nearly 5% in pre-market trading on Tuesday, contributing to an overall increase of more than 37% this year. Additionally, GM announced a third-quarter cash dividend after market close on Monday, which further boosted its stock price.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, mentioning the company’s plans to launch eight new or redesigned models across various sizes in North America. She also reassured investors regarding the scaling of production for the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined growth in electric vehicle production, despite earlier statements that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to market challenges.
Barra disclosed that Cruise, GM’s autonomous driving division, would abandon its Origin vehicle after having to retract its operations last October. Instead, Cruise will focus on testing the next-generation Chevrolet Bolt in Texas and Arizona. This decision comes after GM incurred a $600 million charge related to the halt of Origin production in Detroit.
During a call with analysts, Barra addressed regulatory concerns regarding the Origin’s distinctive design, stating that utilizing the Bolt would help mitigate these issues while lowering costs per unit and optimizing GM’s resources.
“Our vision to transform mobility using autonomous technology is unchanged,” Barra stated. “Every mile traveled and simulation brings us closer because Cruise is an AI-first company.”
In addition, GM is working on restructuring its joint venture in China with SAIC Motor, continuing to face losses, including a $104 million loss in the second quarter. In June, SAIC-GM reduced production by 70%, delivering only 26,000 vehicles, a 50% decrease compared to the previous year, as reported by Automotive News.