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Earnings Outlook: GM earnings: Investors will be inspecting 2022 outlook and EV plans


General Motors Co. is scheduled to report quarterly earnings after the bell Tuesday, with the auto maker’s 2022 guidance front and center for investors.

GM GM, +4.98% is fresh from unveiling the electric iteration of its best-selling Silverado, a pickup that has garnered glowing reviews, and announcing major factory investments for electric vehicles.

The stock has struggled so far this year, however, as Wall Street remains concerned about the impact of supply shortages on auto makers.

For both GM and Ford Motor Co. F, +3.94%, the “focus will be on each company’s 2022 guidance in the face of ongoing chip shortages and supply-chain issues,” CFRA analyst Garrett Nelson said.

Here’s what to expect:

Earnings: The FactSet consensus calls for GM to report adjusted per-share earnings of $1.16 for the quarter. That would compare with adjusted earnings of $1.93 a share in the fourth quarter of 2020.

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 $1.29 a share for GM.

Revenue: The analysts polled by FactSet are calling for sales of $35.8 billion for the auto maker, which would compare with $37.5 billion in the fourth quarter of 2020. Estimize is expecting $35.5 billion in revenue for the quarter.

Stock price: GM shares have underperformed the broader index, gaining 3% in the past 12 months compared with gains of around 21% for the S&P 500 index. SPX, +1.89% The stock has lost around 4% in the past three months compared with losses of around 3% for the S&P.

What else to expect: Wall Street is likely to want more details about that highly anticipated electric Silverado, like its timing and production ramp, CFRA’s Nelson said.

Overall, auto makers have faced “another challenging quarter,” analysts at B. of A. Securities said in a recent note. Production is seen improving, which bodes well for OEMs like GM, they said. Expectations for the broader industry “have been set reasonably low,” they said.

GM gets an advantage as its core business “is being well managed even amidst a choppy macro, while the accelerating focus on future-proofing the business with the development of the necessary components of the future of mobility services, including an autonomous electric vehicle fleet (Cruise Automation + Bolts), car sharing (Maven), and connectivity (OnStar), may provide upside” for the stock, they said.

Goldman Sachs analysts have GM as a top pick alongside Tesla Inc. TSLA, +10.68%

Auto makers’ industry fundamentals will be “generally positive in 2022,” with increasing deliveries and a still-tight supply and demand picture supporting “strong
pricing,” they said.

GM and Tesla are the preferred names “given what we consider to be their strong technology portfolios in EVs and ADAS/AVs,” the Goldman analysts said.

GM has set a goal of being carbon neutral by 2040 and has pledged to invest $35 billion in electric and autonomous vehicles, with plans to have more than 30 EV models globally by 2025.

GM last week confirmed plans to spend nearly $7 billion to in battery and EV factories in Michigan.

Tesla reported its fourth-quarter results last week, while Ford was scheduled to report its earnings on Thursday after the bell.

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