GM investors want to know more about the short- and long-term outlooks.
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General Motors is due to report fourth-quarter numbers Tuesday evening amid a lot of turmoil for the stock, and for the industry. Investors will want to hear about the short-term outlook for earnings as well as long term outlook for electric vehicles that GM is spending billions to bring to market.
It’s been a rocky start to the year for General Motors (ticker: GM) shares. As of midday trading on Monday, GM stock is down about 10% year to date. Many stocks have struggled, though. The S&P 500 index and Dow Jones Industrial Average are off 6% and 4%, respectively.
Wall Street expects GM to report EPS of $1.16 on sales of $35.8 billion. In the year-ago fourth quarter, GM reported EPS of $1.93 on sales of $37.5 billion.
That’s an expected decline, but the car business is in good shape with record vehicle pricing and solid profits. A shortages of semiconductors has constrained production and sales, crimping the latest period.
GM delivered 440,745 vehicles in the U.S. in the fourth quarter, down from 771,323 deliveries a year ago.
The outlook for production, and how GM will navigate the chip shortage, will be a big swing factor for the stock this year. Wall Street is projecting a bounce back, estimating GM’s 2022 sales will come in at about $154 billion, up from roughly $130 billion for 2021. Operating profit in 2022 is projected to be $13.6 billion, up from $13.4 billion expected for all of 2021.
Instead of providing guidance for the full year, GM might guide for only the first half of 2022. Analysts project first-half operating income of about $7.1 billion, down from roughly $8.5 billion a year ago. The $7.1 billion number could be an important reference for investors Tuesday evening.
Beyond earnings, investors and analysts will be looking for guidance about vehicle pricing. New- and used-car prices both hit records in 2021 amid paltry vehicle inventories. The path that inventories will take, and the path vehicle pricing will take, will be another important issue for the company, and for the stock, in coming months. For now, investors will probably accept a tempering of prices as long as it means higher production, and higher earnings, in 2022 compared with 2021.
Investors will also want an update about the Chevy Bolt. GM’s EV isn’t being made or sold right now as the company works through quality issues created by a battery supplier. When that car comes back, and the timing of other EV offerings from GM will be an issue in the earnings report and associated earnings call.
GM will host a conference call at 5 p.m. eastern time after reporting numbers.
Write to Al Root at [email protected]
