General Motors is raising several financial targets for 2024 after exceeding Wall Street’s expectations for its second quarter results.
The Detroit automaker has adjusted its expected adjusted earnings for the year to a range between $13 billion and $15 billion, an increase from the previous forecast of $12.5 billion to $14.5 billion. Additionally, GM has revised its targets for operating cash flow and earnings per share, although net income attributable to shareholders has been slightly lowered by less than 1%, now projected to be between $10 billion and $11.4 billion.
For the second quarter, revenue reached $47.9 billion, marking over a 7% increase from the same period last year and surpassing the $45 billion anticipated by analysts, as reported by FactSet. Earnings per share stood at $3.06, exceeding the expected $2.71 per share, which represents a 60% increase compared to 2023. Net income also rose by 14%, totaling $2.9 billion compared to $2.5 billion a year ago.
Following these results, GM’s stock surged nearly 5% in pre-market trading on Tuesday, contributing to a more than 37% increase in stock price this year. GM announced a third-quarter cash dividend after market close on Monday, further enhancing the stock’s appeal.
In a letter to shareholders, CEO Mary Barra praised the strong performance of its gas-powered trucks and SUVs, while sharing that the company is launching eight new or redesigned models in North America across various sizes. Barra highlighted GM’s commitment to scaling the production of the electric Chevrolet Equinox, while also stating, “as excited as we are about our EVs and our early success, we are committed to disciplined volume growth.”
However, 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 due to a slowdown in the market. The company plans to adapt and “build to demand,” but it noted an increase in its EV sales last quarter.
Additionally, Barra announced that Cruise, GM’s self-driving division, will discontinue its Origin vehicle following a previous operational setback last October. The focus will shift to utilizing the next-generation Chevrolet Bolt as testing continues in Texas and Arizona. GM incurred a $600 million charge related to the halt of Origin production in Detroit.
During an analyst call, Barra indicated that using the Bolt would help address regulatory concerns regarding the Origin’s unconventional design, including the absence of a steering wheel. This decision is also expected to reduce costs per unit and allow for resource optimization.
“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 remarked.
Furthermore, GM is working to restructure its joint venture in China with SAIC Motor, facing ongoing financial losses; the company reported a $104 million loss for the second quarter. In June, SAIC-GM reduced production by 70%, delivering just 26,000 vehicles—50% less than the same period last year, according to Automotive News.