General Motors Co. is scheduled to report quarterly earnings before the bell Tuesday amid concerns about its EV business and a slow start to the year for the auto industry.
GM’s fourth-quarter earnings and guidance “will be solid but unlikely to be a significant catalyst for the stock,” Chris McNally at Evercore ISI said in a note Monday.
Tailwinds include $1.5 billion to $1.7 billion in cost savings and lower expenses with Cruise, GM’s autonomous-driving division, but those are likely to be countered by increasing labor costs following the new United Auto Workers contract and other rising expenses, he said.
Here’s what to expect from GM
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Earnings: Analysts polled by FactSet see GM reporting adjusted earnings of $1.16 a share, which would compare with adjusted earnings of $2.12 a share in the fourth quarter of 2022.
Revenue: Likewise, FactSet consensus calls for a revenue drop to $38.81 billion in the quarter, from the $43.11 billion that GM reported a year ago.
Stock movement: Shares of GM and other automakers have had a rough start to the year. GM stock is down nearly 2%, contrasting with gains of around 3% for the S&P 500 index
SPX.
The longer view is also worrying, with the stock down about 7% versus gains of around 20% for the equity index over the past 12 months.
What else to expect: Investors will be particularly keen on hearing GM’s 2024 guidance, Citi analyst Itay Michaeli said in his note Monday. GM is likely to “embed typical conservatism” into the guidance, particularly because U.S. new-car sales have been off to a “so-so” start of the year, Michaeli said.
“Based on investor conversations, we think the general expectation is for GM to issue a solid 2024 guide that’s in-line with or perhaps a touch ahead of consensus,” he said.
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Besides the guidance, GM is also expected to provide updates on Cruise, including possibly a timetable for restarting road testing and deployment, and updates on future EVs sharing GM’s Ultium platform.
GM scheduled a post-results call with analysts Tuesday at 8:30 a.m. Eastern. The call will be webcast.
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