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General Motors is set to report earnings before the bell. Here’s what Wall Street expects

Mary Barra, CEO, GM at the NYSE, November 17, 2022.

Source: NYSE

DETROIT — General Motors is set to report its second-quarter earnings before the bell Tuesday.

The Detroit automaker is expected to report solid results, driven by favorable industry trends of high prices on new vehicles and increased sales and production.

Here’s what Wall Street is expecting, according to Refinitiv consensus estimates:

  • Adjusted earnings per share: $1.85
  • Revenue: $42.64 billion

Those results would mark sharp year-over-year increases of roughly 62% in adjusted EPS and 19% in revenue.

Some Wall Street analysts believe GM could raise its guidance for a second time this year on the back of stronger-than-expected sales and vehicle pricing for the second quarter. But the company may remain conservative due to potential challenges during the second half of the year, including softening prices and contract negotiations with the United Auto Workers union.

GM previously issued 2023 forecasts of adjusted earnings between $11 billion and $13 billion, or $6.35 to $7.35 a share, and adjusted automotive free cash flow between $5.5 billion and $7.5 billion. Net income is expected to be $8.4 billion to $9.9 billion.

When reporting its first-quarter results in April, the automaker increased its adjusted earnings guidance and free cash flow but lowered its forecasted net income due to $875 million in special charges related to a previously announced employee buyout program during the quarter.

Shares of GM are up roughly 16% this year. They closed Monday at $39.30 per share — off from a 52-week high of $43.63 per share, notched in February.

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Aside from earnings, investors will be eager to hear any updates regarding plans for GM’s new electric vehicles for the remainder of the year, including all-electric versions of the company’s Chevrolet Blazer and Equinox crossovers and Silverado pickup truck. The company also is set to reveal an all-electric version of its flagship Cadillac Escalade SUV.

The automaker also may give additional insights regarding what are expected to be challenging contract negotiations with the UAW. Buoyed by a yearslong national labor movement, new leadership and record company profits, the negotiations are expected to be among the most contentious in recent memory.

The talks formally kicked off earlier this month between the union and GM, Ford Motor and Stellantis.

“The recently launched UAW negotiations are a critical focal point for Ford and GM in 2H,” Barclays analyst Dan Levy said Monday in an investor note.

During the last round of bargaining in 2019, a breakdown in negotiations between GM and UAW led to a national 40-day strike against the company. GM has said the strike cost it about $3.6 billion that year.

The current contracts are set to expire Sept. 14. The deals cover roughly 150,000 UAW members who work for the automakers.

This story is developing. Please check back for updates.

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