General Motors has upgraded its financial targets for 2024 following impressive second-quarter results that exceeded Wall Street forecasts. The Detroit-based automaker has adjusted its projected adjusted earnings for the year to a range of $13 billion to $15 billion, up from an earlier estimate of $12.5 billion to $14.5 billion. Additionally, GM has increased its targets for operating cash flow and earnings per share, although it slightly lowered expectations for net income attributable to shareholders, now estimating between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking over a 7% rise compared to the same period last year and surpassing Wall Street’s expectation of $45 billion, as per FactSet estimates. Earnings per share reached $3.06, exceeding the anticipated $2.71 and showing a 60% increase from 2023. The company’s net income rose by 14% to $2.9 billion, up from $2.5 billion.
After these announcements, GM’s stock rose nearly 5% in pre-market trading and has seen a growth of over 37% this year. The company declared a cash dividend for the third quarter, which further boosted investor confidence.
In her letter to shareholders, CEO Mary Barra highlighted the success of GM’s gas-powered trucks and SUVs and mentioned the introduction of eight new or redesigned models across compact, mid-size, and full-size segments in North America. Barra also indicated that production of the electric Chevrolet Equinox is ramping up and stated, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
Despite the positive outlook, Barra acknowledged that GM will not meet its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. The company has stated it will adopt a flexible approach and “build to demand,” although electric vehicle sales saw growth in the last quarter.
Moreover, Barra announced that Cruise, GM’s autonomous vehicle division, will discontinue its Origin vehicle and will instead utilize the next-generation Chevrolet Bolt as it continues testing in Texas and Arizona. This decision follows a $600 million charge related to pausing production of the Origin in Detroit.
Barra reassured analysts that utilizing the Bolt addresses regulatory concerns associated with the Origin’s unique design, like its absence of a steering wheel, and will also reduce costs per unit while optimizing resources.
“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 stated.
On another front, GM is working to restructure its joint venture with SAIC Motor in China amid ongoing losses, reporting a $104 million loss for the second quarter. In June, production was cut by 70%, resulting in the delivery of only 26,000 vehicles, which is 50% less than the previous year, as reported by Automotive News.