General Motors Co. and Ford Motor Co. are scheduled to report second-quarter earnings on Tuesday and Wednesday, with investors worried about their guidance for the year amid fears of a recession.
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Crucially, however, GM kept its guidance for the year intact.
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Here’s what else to expect:
Earnings: Analysts polled by FactSet expect GM to report adjusted earnings of $1.27 a share in the second quarter, which would compare with adjusted earnings of $1.97 a share in the second quarter of 2021.
Estimize, a crowdsourcing platform that gathers estimates from Wall Street analysts as well as buy-side analysts, fund managers, company executives, academics and others, is expecting an adjusted profit of $1.34 a share for GM.
For Ford, the FactSet analysts call for adjusted earnings of 45 cents a share, which would compare with earnings of 13 cents a share in the second quarter of 2021. The Estimize call for Ford earnings matches FactSet’s.
Revenue: The analysts surveyed by FactSet are calling for sales of $33.9 billion for GM, which would compare with $34.2 billion in the second quarter of 2021. Estimize is expecting $34 billion in revenue for the quarter.
For Ford, the analysts polled by FactSet expect revenue of $37.2 billion, which would compare with revenue of $26.8 billion in the year-ago period. Estimize sees Ford’s revenue at $37 billion.
Stock price: GM and Ford shares have underperformed the broader index. GM has lost about 41% so far this year, and Ford is down 38%. That compares with losses of around 17% for the S&P 500 index SPX,
What else to expect: Last quarter, GM raised its full-year adjusted EPS guidance to between $6.50 and $7.50, from a prior guidance between $6.25 and $7.25, “so investors will be keen to hear whether the company remains on track to hit those targets in the face of escalating cost pressures, chip shortages, and supply chain issues,” CFRA analyst Garrett Nelson told MarketWatch.
“GM is largely viewed as a 2023/2024 story, and investors will be seeking more clarity on the exact timing of when its six Ultium EV models will be available and what reservations are looking like,” he said.
GM earlier Monday launched a free chat tool for customers to ask questions about electric vehicles. EV Live is “an an immersive, virtual experience that allows participants to interact one-on-one with EV specialists and learn everything about electric vehicles,” GM said.
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Ford has its own lineup of electric vehicles, with the first deliveries of the electric F-150 pickup truck driving volume growth for Ford.
“We expect to hear more about the company’s EV ramp-up, as its EV sales rapidly accelerate to a 600,000 run-rate by the end of next year,” Nelson said.
Investors will be keeping an eye on Ford’s 2022 EBIT guidance, which stands at between $11.5 billion and $412.5 billion, which would be growth between 15% and 25% from 2021.
Investors will also want to hear more about Ford’s restructuring and the pace of change at the auto maker, which in March reorganized its business to turn the spotlight onto electric vehicles.
Ford reportedly is planning layoffs in connection with that EV pivot, which the company has not confirmed or denied. The job cuts could represent about $1 billion in savings, “helping to fund investments from early EV losses,” analysts at Evercore ISI said in a recent note.
“If cuts happen over the next few months, would be helpful for (2023) and frontload (Chief Executive Jim Farley’s $3 billion) savings plan to fund EVs,” but “more info is needed,” the Evercore ISI analysts said.
Ford is scheduled to report earnings after the bell Wednesday, and an analyst call with Farley, Chief Financial Officer John Lawler and other Ford executives is slated to follow at 5 p.m. Eastern.
GM is expected to report Tuesday before the bell, with a call following at 8:30 a.m. Eastern.
