General Motors will report its second-quarter 2021 earnings tomorrow, August 4th before the opening bell. The GM Q2 2021 earnings will be noteworthy for investors, stakeholders and fans alike, as it will contain interesting information on many fronts.
The second quarter 2021 earnings will cover the results for the three months of April, May and June.
In June, when it reported its Q1 2021 results, General Motors said that it was “optimistic” about 2021, adding that it expected a “significantly better” first half of 2021 than it imagined previously as a result of improved vehicle deliveries in the U.S. and Canada.
The consensus estimate from analysts seems to have GM reporting adjusted earnings of $1.82 per share compared to an adjusted loss of 50 cents per share during the second quarter of 2020, which represented the heart of the COVID-19 pandemic during which North American plants were closed. GAAP earnings are being consensed at $1.36 per share.
Analysts see adjusted profit coming in at $2.01 per share on between $29.92 billion to $30.36 billion in revenue, an increase from the $16.8 billion in the year-ago quarter.
Things To Watch For
Analysts, investors and stakeholders will be looking for answers and guidance on the automaker’s various strategic initiatives during the GM Q2 2021 earnings report. We expect executives to provide details surrounding the ongoing microchip shortage, along with information related to the automaker’s electric vehicle (EV) push, as well as its autonomous vehicle (AV) efforts.
The microchip shortage shouldn’t be news to anyone even moderately following news from any industry. The shortage has certainly impacted GM, and the extent of the impact will be a topic of discussion during the report. Investors and analysts will want to know how GM is navigating the situation, how it’s impacting The General’s core and future businesses, and when the automaker expects it to be over.
On the EV front, GM has recalled its Chevrolet Bolt EV – currently its only electric vehicles on sale in the U.S. market – for a second time in July due to a fire hazard. The automaker currently recommends owners not charge or keep the EV in their garages. The fire and ensuing recall has raised questions about consumer confidence in the company’s EV strategy, which calls for launching 30 new EVs by 2025.
There’s also GM’s tie-up with Nikola. The agreement, announced in November 2020, had GM invest (via stock) in the start-up firm in exchange for an ownership stake and a seat on its board of directors. The deal, championed by GM exec Steven Girsky, has since gone from a potential “deal of the decade” to somewhat of a mess, as charges were brought against Nikola’s Trevor Milton, its founder and former executive chairman. Milton was indicted of fraud by the U.S. Attorney’s Office for the Southern District of New York. According to a grand jury indictment, Milton made “false and misleading statements” to investors about “nearly all aspects of the business.”
The original deal between GM and Nikola called for The General to develop and produce the Badger electric pickup while supplying hydrogen components for Nikola’s commercial trucks. The Badger pickup has been nixed, and it’s unclear – as of this writing – whether the hydrogen part of the deal is still on track.
Other EV-related items likely on the minds of Wall Street are GM’s plans to build two additional battery cell plants in the United States by 2025, on top of two similar plants already under construction in Ohio and Tennessee.
Tangentially related to electric cars is GM’s autonomous vehicle (AV) undertaking. The General’s Cruise subsidiary has been working on a robo-taxi vehicle – named the Cruise Origin – and associated service that was initially set to launch roughly two years ago. Though Cruise has been making progress in testing and development, a launch timeframe has been murky. In September 2020, GM Vice President of EVs and AVs, Ken Morris, said in a memo that the Cruise program is on schedule.
So far in 2021, GM shares have outperformed the broader market, posting gains of nearly 40 percent compared to 18 percent average gains for the S&P 500 index.
GM stock growth compares favorably to that of key rivals: Tesla has grown 1 percent during the same timeframe while Ford Motor Company shares have risen 58 percent during the same period.