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General Motors (GM) made a profit in the second quarter and raised its outlook, a week after its rival Ford (F) raised guidance and noted an improvement in chip supply. GM shares fell.
GM earnings
Estimates: Wall Street expects EPS of $ 1.82 from a loss of 50 cents a share a year ago, according to FactSet. Other estimates put it at $ 2.23. Revenue is expected to increase 78% to $ 29.92 billion.
Analysts expect cash consumption of $ 184 million in the second quarter. General Motors lost $ 9.042 billion in cash in the quarter of last year, amid widespread plant closures.
Results: EPS of $ 1.97 on revenue of $ 34.17 billion. Cash flow turned positive at $ 2.48 billion and Adjusted EBIT stood at $ 4.1 billion.
GM Financial recently granted Cruise a $ 5 billion line of credit to advance its Origin self-driving car commercialization ramp.
Outlook: GM now has full-year adjusted EBIT of $ 11.5 billion to $ 13.5 billion, up from $ 10 to $ 11 billion previously.
The company also raised its 2021 EPS to $ 5.40- $ 6.40 from an earlier view of $ 4.50 to $ 5.25. But that’s still lower than Wall Street’s estimate of $ 7.07.
Ford reported surprise earnings last Wednesday and raised its guidance for Adjusted EBIT and cash flow for 2021. As the tight supply of chips eased, management warned that the situation ” remains fluid “.
It came after You’re here (TSLA) said it remains serious and difficult to predict, with the chip giant Intelligence The shortage of warnings (INTC) could extend until 2023.
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GM actions
The shares fell 4% to 55.59 in Wednesday morning trading. GM stock is working on a cup-shaped buy point of 64.40, but is well below the entry for now, according to MarketSmith’s chart analysis. Ford stock fell 1.2%, Tesla stock rose 0.1% and Stellantis (STLA) added 2.3%, a day after the former Fiat Chrysler announced $ 7 billion in profits in the first half of 2021.
Toyota (TM) fell 0.8% to 184.50, after reporting strong earnings but warning of a prolonged chip shortage. Toyota stock flirted with a flat-based buy point of 185.48 on Tuesday, a day ahead of earnings. Honda (HMC) rose 0.5% after beating second-quarter views.
In July and August, General Motors and Ford put their factories back to idle due to a persistent shortage of chips. Some of these factories had resumed production after a period of shutdown in the spring.
Yet GM said it continued to prioritize its popular and profitable full-size trucks and SUVs during the crisis.
Tuesday, Nicolas (NKLA) warned that supply chain problems “seemed to be spreading quite a bit” rather than peaking, reducing targets for revenue and vehicle deliveries. The electric truck startup and GM continue to team up on hydrogen fuel cells, after scaling back an older and larger EV partnership.
Meanwhile, General Motors and Ford continue to step up on EVs and AVs (electric vehicles and autonomous vehicles). In June, GM increased its AV-EV investment to $ 35 billion, from $ 27 billion. It plans to go all-electric by 2035 and has made key deals with battery and lithium suppliers in recent months.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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