General Motors has raised several financial targets for 2024 after significantly exceeding Wall Street’s estimates for its second quarter performance.
The Detroit-based automaker now expects its adjusted earnings for the year to fall between $13 billion and $15 billion, an increase from the previous range of $12.5 billion to $14.5 billion. Additionally, it has raised its projections for operating cash flow and earnings per share, while slightly reducing its expectations for net income attributable to shareholders to a range of $10 billion to $11.4 billion.
In the second quarter, GM reported revenues of $47.9 billion, marking a more than 7% increase compared to the same period last year and surpassing Wall Street’s expectations of $45 billion, according to FactSet estimates. Earnings per share stood at $3.06, exceeding analysts’ predictions of $2.71 per share and representing a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion in the previous year.
Following this news, GM’s stock saw a nearly 5% increase in pre-market trading on Tuesday, with the stock price having risen over 37% this year. On Monday, the company also declared a cash dividend for the third quarter, further contributing to the stock’s positive momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs, mentioning that the company is set to launch eight new or redesigned models in North America. Barra emphasized that GM is ramping up production of the electric Chevrolet Equinox and expressed a commitment to disciplined growth despite the excitement surrounding their electric vehicle (EV) lineup.
Earlier this month, Barra indicated 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 remain flexible and “build to demand,” although it saw an increase in EV sales in the previous quarter.
Furthermore, the CEO announced that Cruise, GM’s autonomous driving division, will discontinue its Origin vehicle project. Instead, Cruise will focus on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. GM incurred a $600 million charge due to the halt in production of the Origin in Detroit.
During an analyst call, Barra noted that transitioning to the Bolt would help address regulatory concerns regarding the Origin’s unconventional design, which lacks a steering wheel. This shift is expected to reduce costs per unit and enhance resource optimization.
“Our vision to transform mobility through autonomous technology remains unchanged, and every mile traveled, along with every simulation, brings us closer because Cruise is an AI-first company,” Barra stated.
In addition, GM is working to restructure its joint venture in China with SAIC Motor, which continues to experience financial losses. The company reported a $104 million loss for the second quarter. In June, SAIC-GM scaled back production by 70%, delivering 26,000 vehicles—50% less than the previous year, according to Automotive News.