General Motors has raised its financial targets for 2024 following strong second-quarter performance that exceeded Wall Street’s forecasts. The Detroit-based automaker now expects adjusted earnings for the year to range between $13 billion and $15 billion, an increase from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share. However, it slightly lowered expectations for net income attributable to shareholders by less than 1%, now estimating it to be between $10 billion and $11.4 billion.
In the second quarter, GM’s revenue reached $47.9 billion, marking a more than 7% rise compared to the same period last year and outperforming the anticipated $45 billion. Earnings per share were reported at $3.06, surpassing analysts’ expectations of $2.71 and indicating a 60% increase from 2023. The company’s net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following this positive report, GM’s stock rose nearly 5% in pre-market trading on Tuesday, with the stock increasing over 37% throughout the year. After the market closed on Monday, GM announced a third-quarter cash dividend, further boosting investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs while announcing plans for the launch of eight new or redesigned models in North America. She emphasized the company’s commitment to scaling production of the electric Chevrolet Equinox, stating that despite optimism about electric vehicles (EVs), GM is dedicated to disciplined volume growth.
Earlier this month, Barra acknowledged that GM would not meet its goal of producing 1 million electric vehicles in North America by the end of 2025, citing a market slowdown. The company has mentioned its flexibility to “build to demand,” although EV sales reported growth in the last quarter.
Barra also announced that Cruise, GM’s autonomous vehicle unit, will abandon its Origin vehicle design after having to retract operations due to an incident last October. The unit will focus on utilizing the next-generation Chevrolet Bolt during testing in Texas and Arizona. GM incurred a $600 million charge related to the halt in the Origin’s production in Detroit.
During a call with analysts, Barra indicated that using the Bolt could address regulatory concerns regarding the unique design of the Origin, such as its omission of a steering wheel. She stated that this shift would reduce costs per unit and better allocate resources.
Despite these challenges, Barra reiterated GM’s commitment to transforming mobility through autonomous technologies, expressing confidence that each mile and simulation leads the company closer to its goals. Additionally, GM is working to restructure its joint venture with SAIC Motor in China, which has faced ongoing losses, reporting a $104 million loss in the second quarter alone. In June, SAIC-GM significantly reduced production by 70%, delivering 26,000 vehicles, a 50% decrease from the previous year.