General Motors CEO Mary Barra, center, on the New York Stock Exchange, November 17, 2022.
Source: NYSE
DETROIT — Wall Street expects General Motors will stand out amongst traditional Detroit automakers when it publicizes its second-quarter results this week: Sales and vehicle prices at America’s largest automaker remained stable in the primary half of the yr.
According to average analyst estimates from financial market data and analytics firm LSEG, GM is anticipated to report solid adjusted earnings of $2.75 per share, up 44.2 percent from a yr ago, and revenue of $45.46 billion, up 1.6 percent from the identical period last yr.
Compared to the LSEG estimates for Ford Motor They expect second-quarter adjusted earnings per share of 68 cents, down 5.2% from the second quarter of 2023. According to LSEG, Ford’s automotive revenue is anticipated to extend 3.8% year-over-year to $44.02 billion.
GM will announce its results on Tuesday before the market opens. Ford will report on Wednesday afternoon after the market closes, followed by Chrysler parent Stellantiswhich publicizes its earnings every two years, released its first-half results on Thursday morning.
Several Wall Street analysts expect GM to set its 2024 forecast on the upper end of the automaker’s already raised forecast, if not raise it again as a part of its second-quarter results. There is less consensus on the outlook for Stellantis and Ford.
GM, Ford and Stellantis shares in 2024.
“We expect both Ford and GM to deliver solid second-quarter results, driven by favorable pricing. Volume and mix will favor Ford, while GM should benefit from favorable cost comparables,” Barclays analyst Dan Levy said in a July 15 investor note. “Both are expected to raise their 2024 guidance.”
Evercore analyst Chris McNally stays “positive [on] GM (particularly versus Ford),” citing the automaker’s lower prices. However, Evercore still expects a “solid” second quarter for Ford and is trending toward the upper half of its previously announced 2024 forecast.
Ford’s forecast for the yr is for adjusted earnings before interest and taxes (EBIT) of between $10 billion and $12 billion and free money flow of $6.5 billion to $7.5 billion.
GM forecasts adjusted earnings of $12.5 billion to $14.5 billion, or $9 billion to $10 billion per share, and adjusted automotive free money flow within the range of $8.5 billion to $10.5 billion for 2024.
“Expect both companies to report solid quarters, with either confident confirmations of previous forecasts (i.e. at the upper end of the range) or modest upward revisions,” Citi analyst Itay Michaeli said in a July 11 investor note.
Ford CEO Jim Farley at an automaker battery lab in suburban Detroit to announce a brand new $3.5 billion electric vehicle battery factory within the state to supply lithium iron phosphate batteries on Feb. 13, 2023.
Michael Wayland/CNBC
Stellantis, with major operations in North America and Europe, is in a distinct position in comparison with its competitors.
The transatlantic automaker is anticipated to report adjusted operating profit for the primary half, but investors are concerned about its North American business.
The company is correcting mistakes that CEO Carlos Tavares called “arrogant” that led to declining sales, bloated inventories and investor concerns during an investor event last month.
Despite the issues, Stellantis CFO Natalie Knight said in the course of the June event that the corporate’s adjusted operating profit margin will probably be between 10 and 11 percent in the primary half of the yr.
It also reiterated Stellantis’ 2024 guidance, which calls for a double-digit adjusted operating profit margin, positive industrial free money flow and a return of capital to investors in the shape of dividends and buybacks.
Stellantis shares are expected to fall greater than 12% in 2024, in comparison with GM’s 36% gain and Ford’s 18% gain.
Stellantis CEO Carlos Tavares speaks to the media following the corporate’s investor day on the North American headquarters in Auburn Hills, Michigan, on June 13, 2024.
Michael Wayland / CNBC
Tavares noted that Stellantis was facing three problems: slow sales of car inventories, problems with production, particularly at two unnamed plants, and an absence of “sophistication in launching.”
Stellantis, which owns brands equivalent to Jeep and Ram within the US, is anticipated to report a year-on-year decline in sales of 11.3% to 45.37 billion euros (49.39 billion dollars), in response to LSEG.
Analysts proceed to expect Stellantis to be profitable in 2024. The forecast adjusted earnings per share are $4.82. However, that will be a decline of 18.9 percent from the previous yr.
At GM, Ford and Stellantis alike, investors will probably be waiting for updates on their electric vehicle plans, capital spending and rising recent automotive inventories within the U.S.
“We imagine that the dynamics of the US automotive cycle will proceed to supply strong [automaker] earnings streams, maintaining healthy price momentum despite some normalization,” said Barclays’ Levy. “Nevertheless, inventories have risen. … We imagine rising inventories must be monitored as incremental negative data points can put pressure [automaker] Shares.”
— CNBC’s Michael Bloom contributed to this report.
