The financial markets are eagerly awaiting the second-quarter results of the traditional Detroit automakers, with General Motors (GM) expected to be the standout performer. Wall Street analysts are forecasting GM to report a solid adjusted profit of $2.75 per share, representing a significant increase of 44.2% from the previous year. Additionally, GM is expected to report revenue of $45.46 billion, a 1.6% improvement over the prior-year period. This positive outlook for GM is attributed to stable sales and vehicle prices during the first half of the year, making it America’s largest carmaker in terms of revenue and profitability.
In contrast to GM’s optimistic projections, Ford Motor is expected to report a decline in adjusted earnings per share for the second quarter. Analysts are estimating earnings of 68 cents per share, down 5.2% from the same period the previous year. However, Ford’s automotive revenue is anticipated to increase by 3.8% to $44.02 billion. The final traditional Detroit automaker, Stellantis, is facing challenges in North America, with concerns raised about its operational performance in the region. While the company is expected to report an adjusted operating profit for the first half of the year, shareholders remain wary of its North American business operations.
Several Wall Street analysts have offered their insights into the financial performance of these automakers. Barclays analyst Dan Levy expects both Ford and GM to surpass expectations in the second quarter, driven by favorable pricing and other factors. Evercore analyst Chris McNally expresses a positive outlook on GM compared to Ford, emphasizing the former’s competitive pricing advantage. Citi analyst Itay Michaeli anticipates solid quarterly performances from both companies, with potential revisions to their 2024 guidance.
Stellantis, the transatlantic automaker with major operations in North America and Europe, is currently addressing operational challenges in the region. CEO Carlos Tavares acknowledged mistakes that have impacted sales and investor confidence. The company’s finance chief, Natalie Knight, reaffirmed Stellantis’ guidance for 2024, including positive industrial free cash flow and capital returns to investors. However, Stellantis shares have experienced a decline in 2024, unlike GM and Ford, which have seen positive growth in their share prices.
Investors will be closely monitoring GM, Ford, and Stellantis’ plans for electric vehicles, capital spending, and inventory levels in the U.S. Despite the positive earnings outlook for traditional Detroit automakers, rising inventory levels remain a concern. Barclays’ Levy emphasizes the supportive dynamics of the U.S. auto cycle for automaker earnings, although inventory levels have increased, warranting further scrutiny.
While GM is poised to deliver robust financial results in the second quarter, Ford and Stellantis face challenges that could affect their performance and investor sentiment. Analysts’ projections provide valuable insights for investors to carefully assess the financial health and prospects of the Detroit automakers in the coming quarters.