General Motors has raised several financial targets for 2024 after exceeding Wall Street’s expectations in its second quarter results. The Detroit-based automaker has adjusted its projected adjusted earnings for the year to between $13 billion and $15 billion, a rise from the previous range of $12.5 billion to $14.5 billion. It also increased its operating cash flow and earnings per share targets, while slightly lowering expectations for net income attributable to shareholders to between $10 billion and $11.4 billion.
In the second quarter, GM reported revenue of $47.9 billion, marking over a 7% increase compared to last year and surpassing Wall Street’s $45 billion prediction, according to FactSet estimates. Earnings per share reached $3.06, exceeding the analyst forecast of $2.71 and representing a 60% increase from 2023. Net income rose by 14% to $2.9 billion, up from $2.5 billion.
Following the announcement, GM’s stock surged nearly 5% in pre-market trading on Tuesday, and the stock has increased more than 37% this year. Additionally, GM declared a cash dividend for the third quarter, which contributed to the stock’s upward momentum.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, while outlining plans to launch eight new or redesigned models across various sizes in North America. Barra stated that GM is ramping up production of the electric Chevrolet Equinox and emphasized the company’s commitment to disciplined volume growth despite setbacks in the electric vehicle (EV) market. She mentioned that GM will not reach its target of producing 1 million EVs in North America by the end of 2025 due to a market slowdown, but noted that EV sales did increase last quarter.
Barra also announced that Cruise, GM’s self-driving division, would discontinue its Origin vehicle amid operational issues and instead focus on using the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes after GM incurred a $600 million loss related to halting Origin production in Detroit. Barra explained that utilizing the Bolt would address regulatory concerns regarding the unique design of the Origin, which notably lacks a steering wheel, and would help reduce costs and optimize resources.
In addition, GM is working to restructure its joint venture in China with SAIC Motor, which has been experiencing losses; the company reported a $104 million loss for the second quarter. Earlier this year, SAIC-GM significantly reduced production by 70%, delivering only 26,000 vehicles, which is 50% less than the same period last year.