When it comes to traditional Detroit automakers, General Motors seems to be the one standing out among the rest. With stable sales and vehicle prices in the first half of the year, GM is expected to report a solid adjusted profit for the second quarter. Wall Street analysts estimate that GM will report earnings of $2.75 per share, up 44.2% from the previous year, and revenue of $45.46 billion, up 1.6% compared to the same period last year. This is in stark contrast to Ford Motor, whose adjusted earnings per share for the second quarter are expected to decrease by 5.2% to 68 cents. Ford’s automotive revenue, on the other hand, is predicted to rise by 3.8% to $44.02 billion. GM will be sharing their earnings report on Tuesday, with Ford following suit on Wednesday, and Stellantis releasing their results on Thursday.
Analysts are optimistic about GM, with many expecting the automaker to guide towards the higher end of their already raised guidance for 2024. This positive outlook is driven by favorable pricing and volume/mix benefits for Ford and GM. Barclays analyst Dan Levy believes that both Ford and GM will post solid second-quarter results and may raise their 2024 guidance. The future of Stellantis, however, seems less certain. While the company is expected to report an adjusted operating profit for the first half of the year, concerns remain regarding its North American operations. The company’s finance chief, Natalie Knight, reassured investors about their 2024 guidance, which includes a double-digit adjusted operating income margin and positive industrial free cash flow.
Stellantis, the transatlantic automaker with major operations in North America and Europe, is facing some significant challenges. CEO Carlos Tavares recently admitted to “arrogant” mistakes in the North American region, leading to sales declines and bloated inventories. Despite these issues, Stellantis is still expected to be profitable in 2024, with projected adjusted earnings per share of $4.82. Shares of Stellantis have seen a decline of over 12% this year, compared to the growth of GM and Ford stocks. Tavares highlighted three main issues facing Stellantis: slow vehicle inventory turnover, manufacturing problems in certain plants, and a lack of sophistication in marketing strategies.
Focus on Electric Vehicles and Capital Spending
Investors will be closely monitoring the electric vehicle plans, capital spending, and new vehicle inventory levels for GM, Ford, and Stellantis. Despite some challenges, industry experts believe that the U.S. auto market remains supportive of strong earnings for automakers, citing healthy pricing dynamics. While inventory levels have increased, there is optimism about the future of American automakers adapting to changing market conditions.
General Motors appears to be leading the pack among traditional Detroit automakers, with a positive outlook for the future. Ford is also expected to have a solid second quarter, while Stellantis faces some challenges but remains focused on profitability. The evolving landscape of the automotive industry, including the shift towards electric vehicles and changing consumer preferences, will continue to shape the future of American automakers.