General Motors has revised its financial targets for 2024 upward after surpassing Wall Street’s expectations for the second quarter.
The Detroit-based automaker increased its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. It also raised its projections for operating cash flow and earnings per share, while slightly lowering its expectations for net income attributable to shareholders to between $10 billion and $11.4 billion, a decrease of less than 1%.
For the second quarter, GM reported revenue of $47.9 billion, reflecting a growth of over 7% compared to the same period last year and exceeding Wall Street’s forecast of $45 billion, according to FactSet. Earnings per share reached $3.06, surpassing the anticipated $2.71, and representing a 60% increase from 2023. The company’s net income rose by 14% to $2.9 billion, compared to $2.5 billion in the previous year.
Following these announcements, GM’s stock jumped nearly 5% in pre-market trading on Tuesday and has experienced a growth of more than 37% this year. The company also declared a third-quarter cash dividend after the market closed on Monday, which contributed to the stock’s positive performance.
In a letter to shareholders, CEO Mary Barra highlighted the strong sales of gas-powered trucks and SUVs and mentioned that GM is launching eight new or redesigned models in various categories in North America. She emphasized the company’s commitment to producing the electric Chevrolet Equinox while maintaining steady growth in electric vehicle production, despite acknowledging that GM will not meet its target of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown.
Additionally, Barra announced that Cruise, GM’s self-driving division, would discontinue its Origin vehicle in favor of using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision follows a production halt of the Origin, resulting in a $600 million charge for GM.
During a call with analysts, Barra stated that the change would address regulatory concerns related to the Origin’s unique design and also reduce per-unit costs, allowing for optimal resource use.
“Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled, and every simulation, brings us closer because Cruise is an AI-first company,” Barra affirmed.
Lastly, GM is working to restructure its joint venture with SAIC Motor in China, facing significant losses, including a reported loss of $104 million in the second quarter. In June, SAIC-GM reduced production by 70% and delivered only 26,000 vehicles, which was 50% less than the previous year, according to Automotive News.