General Motors Co. (GM) is scheduled to release its second-quarter earnings before the bell on Tuesday, providing an update on the carmaker's electric vehicles (EVs) and the potential for an improved outlook.
Outlook Raise Anticipated
GM raised its profit outlook for 2023 in April, and there is speculation that the company may further enhance its full-year guidance. This optimistic outlook can be attributed to "rebounding volumes and moderating inflationary pressures," according to CFRA analyst Garrett Nelson.
A Promising Quarter Ahead
Overall, the April-June period is expected to be a solid one for GM. However, some concerns linger regarding the longer-term outlook, as Nelson points out growing signs of EV market oversaturation. Despite aggressive discounting, EVs are not attracting much interest from buyers, and dealer lots are becoming well-stocked with these vehicles even before GM's first Ultium battery model hits the market.
Key Figures to Watch Out For:
- Earnings: Analysts surveyed by FactSet project adjusted earnings of $1.87 per share for GM's second quarter. In comparison, the company reported earnings of $1.14 during the same period in 2022.
- Estimize, which gathers estimates from various sources such as sell-side and buy-side analysts, fund managers, and academics, anticipates GM to report earnings of $1.96 per share.
The upcoming earnings report from General Motors will shed more light on its performance and offer insights into the future of the company's EV strategy.
GM Expects Growth in Revenue and Sales
According to analysts surveyed by FactSet, General Motors (GM) is projected to report revenue of $42.1 billion for the current quarter, compared to $35.8 billion in the same period last year. The Estimize call expects revenue to reach $41.9 billion.
GM shares have seen a 17% increase so far this year, slightly lower than the 19% gain of the S&P 500. Over the past three months, GM's stock has declined by 2%, while the S&P has gained 2.4%.
Improved Sales Forecast:
Karl Brauer, from iSeeCars.com, anticipates that GM will experience improved sales for its traditionally powered vehicles in the second half of the year. He believes that the demand for internal-combustion vehicles remains strong, which will lead to increased profitability.
However, attention should be paid to the second half of the year as signs indicate a potential slip in demand. Brauer expects that price cuts will extend beyond electric vehicles and also impact gasoline vehicles over the next six to twelve months.
Wall Street Anticipation:
Analysts at Evercore ISI also anticipate another strong quarter for GM. However, they believe that this performance is well anticipated by Wall Street due to the company's recent sales and production numbers. They suggest that GM's stock will likely trade within a range between the low $30s and low/mid $40s as challenges persist.
In summary, GM expects growth in revenue and sales, driven by improved sales of traditionally powered vehicles. However, potential challenges lie ahead, including the possibility of decreased demand and the need for price cuts. Wall Street anticipates a strong quarter for GM but believes that the stock will trade within a specific range due to ongoing headwinds.
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