General Motors (GM) reported better-than-expected earnings an sales early Tuesday amid robust truck sales and record EV sales in a difficult market. The auto giant will revamp its money-losing China and autonomous driving effort. GM stock tumbled after initially jumping before the open to a two-year high.
Ford Motor (F), which reports Wednesday night, fell below a buy point.
Expectations rise for a Fed rate cut later this yr are bolstering automakers. Lower rates on automobile loans would make repayments easier for consumers, propping demand.
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General Motors Earnings
Estimates: Analysts on average expected GM earnings to leap 41% to $2.71 a share, in step with FactSet. They saw revenue growing about 1% yr over yr to $45.1 billion.
Results: General Motors earnings raced 60% higher to $3.06 a share, an infinite acceleration from Q1’s 19%. Revenue rose 7% to $47.97 billion, dipping from Q1’s 8%.
Outlook: GM now sees full-year adjusted EPS of $9.50-$10 and adjusted EBITS of $13 billion-$15 billion, up from $9-$10 and $12.5 billion-$14.5 billion, respectively. Analysts had forecast 2024 EPS of $9.45.
GM Pauses Cruise Origin Effort
General Motors will halt indefinitely production of a Cruise Origin autonomous vehicle. It took a $600 million charge inside the second quarter.
GM Goals To Restructure China Ops
General Motors suffered a $104 million loss in equity volume via its China three way partnership with state-owned SAIC. GM’s China sales are in freefall amid pressure from local competitors, notably BYD (BYDDF).
GM Stock Jumps
Shares of General Motors tumbled 6.2% to 46.47 in Tuesday’s stock market motion after initially climbing 4% before the open. GM stock rose 2.6% on Monday.
GM stock is back in range of a 46.16 flat-base buy point, first cleared on June 10. It’s below a 49.35 entry from a temporary consolidation.
GM stock was up 38% for the yr thus far as of July 22.
Ford stock lost 2.4% to 13.78 Tuesday, falling below a 13.95 cup-with-handle buy point. Shares broke out on July 12, then hit a 52-week high of 14.85 intraday Thursday before pulling back Friday.
Ford is about to report Q2 earnings Wednesday after the market close.
Tesla (TSLA) dipped 1.1% early Tuesday with earnings due tonight. Shares jumped 5.15% on Monday.
Auto Sales, EV Sales, Share Buybacks
Despite a crippling cyberattack, General Motors, Ford Motor and the broader U.S. auto industry grew auto sales modestly inside the second quarter.
Analysts blamed high rates of interest, steep vehicle prices and economic uncertainty for the muted growth.
Despite those headwinds, GM delivered a formidable 696,086 vehicles in Q2, led by pickup trucks. The automaker claimed its best auto sales quarter since Q4 2020, along with its best EV sales quarter ever.
GM’s EV deliveries jumped by 40% to almost 22,000. The surge highlighted GM’s growing momentum within the electrical vehicle market after challenges, while Tesla tries to return to growth.
General Motors continues to push out latest electric vehicles, but challenges remain.
On Monday, GM CEO Mary Barra forged doubt on her company’s ability to achieve targeted production capability for 1 million electric vehicles by 2025. On Thursday, Ford said it’d expand production of its F-150 Super Duty trucks to a Canadian factory that was meant to offer electric cars.
Shareholder-friendly policies proceed to boost GM stock in a difficult market. The company unveiled a modern $6 billion share repurchase program on June 11, citing profitable gas trucks and EV improvement.
GM stock offers a 12-cent quarterly dividend per share, yielding 0.8%.
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