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.
Expectations
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.
Stock
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.
GM Authority will be here to bring you live coverage of the GM Q2 2021 earnings tomorrow morning, so be sure to subscribe for more GM financial news and around-the-clock GM news coverage.
Comments
Gosh, who wrote this? GM has no interest in Nikola other then an MOU for Nikola to buy Hydrotec fuels cells and other parts. There is no partnership or financial interest of any kind, and GM did not invest any $$ in Nikola.
If there was any controversy in GM investments it would be in Lordstown Motors, but in that GM got rid of a derelict factory for much cheaper then tearing it down. It was a good investment even if Lordstown Motors goes kaput.
I’m your guy, here to the rescue to set you straight.
Correction 1: GM made no cash investment in Nikola, but it did make a stock investment, which still carries a financial burden. The article has reflected this since going live, so not sure what the fuss is about.
Correction 2: GM’s interest went far beyond “an MOU for Nikola to buy Hydrotec fuel cells and other parts.” It was also to develop and build an electric, consumer-grade pickup for Nikola using GM’s BT1 platform, Ultium batteries and Ultium Drive motors. That would have resulted in a net positive impact for GM as far as economies of scale are concerned for those three pieces and the Detroit-Hamtramck/Factory ZERO plant. Scale is vital for electric vehicles and their profitability.
Correction 3: there is no and has been no controversy surrounding GM’s involvement with Lordstown Motors, since GM’s so-called investment in was purely related to dumping the factory.
Correction 4: the real cost isn’t associated with “tearing down” a factory (like Lordstown), at least as far as physical space is concerned. The cost is and has always been associated with employees and the union, pensions, etc. You picked the right plant, but your focus on the true cost is off.
Anything else you wish to take issue with?
Show me a disclosure from GM that they has any interest in Nikola stock? GM did not close on the initial reported agreement with Nikola, and after the Hindenburg report, that initial agreement was completely wiped out. The New agreement was only to supply Fuel Cells and parts to Nikola, there was no stock investment made. There is no mention of Nikola in any GM financial disclosures, however Lordstown Motors is mentioned in many entries. How do you explain that?
2. As for the Badger (never existed), GM does not need that scale, and can clearly now see demand for their own BT1 products will overwhelm their capacity to build the vehicles and batteries. GM is now trying to figure out where he next BT1 plant will be, as Factory Zero will only be able to keep up for the first few years of demand. (BTW, your site still lists the BT1 platform as a “body on frame” version of the T1 platform, which could not be further from the truth. Not 1 part or dimension is shared between BT1, and T1. GMC on their site for the Hummer EV states the Hummer “does not have frame rails” and is an “integrated body and structure”)
3. On Lordstown, maybe you cannot read well either? My statement was “If there was any controversy in GM investments” If If If… Get it?
4. On the Lordstown plant, the closure was already in effect before Lordstown Motors was ever thought of, and as a result the cost of terminating of employees and future pensions expenses had already been absorbed. The future cost for GM on that Lordstown site, was to reclaim the site, so by selling it, they were able to pass that liability to another party.
So Ya, send me GM financial disclosures on the closing of the deal with Nikola, and fix your sites inaccuracies on the BT1 platform description.
Donovan you’re hilarious!!! Are you really suggesting that GM actually did their due diligence in regards to Nikola? It’s obvious that they didn’t. With Nikola, GM thought they saw the makings of another Tesla and jumped on the bandwagon that is Nikola vaporware. There was no due diligence, there was no research to see what Nikola does or doesn’t have… they just wanted a piece of the action that turned out to be pure vaporware.
Also the notion that GM didn’t spend any money in the Nikola deal is bull. Stock isn’t free, ya know? There’s the opportunity cost of not distributing shares to the public and not vesting execs with those shares, etc.
Your attempt at discrediting Alex is laughable. He’s a foremost GM expert and follows this company like no one else. And please do stop hiding behind a fake handle and at least provide your name like a real man.
Dox yourself because Lisa told you to. Be A Man.
Please also reveal your credit card numbers and address of residence.
Leslie, do you know how publicly traded companies work? Alex says GM did not put cash into the deal Nikola, but they put stocK? Who’s stock? GM gave Nikola GM stocK? Ummm, Both companies have to disclose this, send me the SEC filing?
GM did not do enough due diligence on Nikola, and nearly got burned, although the original deal mostly favored GM, as they were going to receive Nikola stock worth $2B, and cash payment of $700M to pay to develop and tool for the Badger. That is in an SEC filing, and there is another SEC filing cancelling that deal. But I do not see an SEC filing with GM or Nikola where they award stock? So I am not as much attacking Alex personally, but his understanding of these dealings might need some review? Just like this site claiming the BT1 truck platform is a derivative of the T1 platform, and Body on Frame, GMC disagrees in the Hummer Press release. It clearly states the Hummer does “not have frame rails”, and uses an “integrated body and chassis”. BT1 does not share any component of the T1 platform (other than maybe some GM parts bin interior parts), nor is it designed using the same type of structure or load transfer.
So Alex may be a GM guru, but he is not perfect, and on some things is flat out wrong!
Donovan you really should stop assuming people don’t know what they’re talking about and instead open your ears and listen.
If you truly believe GM was NOT interested in building a BEV truck for Nikola, then you’re delusional. The fact of the matter is GM need to pinch every penny and amass as much scale as they can to make money on EVs. Like Alex said, they wanted to build the truck for Nikola for that very reason.
Whether you want to believe that or not is a whole other story. If you don’t believe that, then riddle me this: what’s the point of making the deal with Nikola anyway if not for EVs? No it is not for hydrogen, which has been a fun science project for GM but nothing more than that. That’s why GM are not building HydroTec plants but instead are building for BEVs and Ultium.
It is blatantly obvious that GM didn’t do their homework when getting into bed with Nikola. It’s literally that simple. Agree or not, those are the facts. Awaiting your next retort to prove to the world you’re always right.
@Corvette,
In the article above Alex listed things to watch for in the earnings and then went into “Nikola”. GM has zero stock in Nikola, and the deal announced last year was cancelled per SEC filing.
As for GM not doing their due diligence before announcing the Nikola deal, of Course that is true, GM was conned. and fooled by a con man, that created an illusion to get GM to legitimize their company. That deal with Nikola however NEVER CLOSED!!!!!! Meaning it just went away. There was a new agreement announced where Gm will sell parts to Nikola, but in the last 2 earnings reports Nikola has not been mentioned, or asked about. There is no deal. GM has no financial interest in Nikola currently, and Nikola is nowhere mentioned in GM’s last 2 quarterly filings. Lordstown however is mentioned, because GM does have a financial interest there.
At the time GM was negotiating with Nikola, GM was worried about selling enough EV’s to fill the capacity of their battery plant. That has changed now, GM has had the doors knocked down with people wanting to make deposits on the Hummer EV, and my Cadillac dealer says the Lyriq is getting far more interest at the dealership the any car they have ever had upcoming. GM is no longer worried about filling their upcoming battery plant capacity, and has in fact announced 2 more battery plants by 2025, in addition to the 2 under construction currently.
Wednesday August 5th?
Nice to see that gm is still pursuing hydrogen. Kind of wish they’d stop investing billions in SPACs and put some of those funds into developing a more competitive B/C segment offering to help capture first-time buyers. The Corolla and Civic have more than proven that the entry level sedan market isn’t going anywhere… It was a mistake for gm to completely abandoned the segment. Both of these offerings co-exist with their sub-compact crossovers to dominate entry level sales.
If it gets to $60 again, I’m selling my 100 shares.
Warren Buffett has trimmed his stakes in gm since 2020… If there we huge gains to be made I think he would have stayed more invested… Also Mary Barra has sold off atleast 50% of her shares… I think the stock is stable short term, but unless gm sees lots of subsidization from the infrastructure bill the next 5 years could be umm… Questionable.
WB trimmed Apple too, and the Airlines at the bottom last march.. WB has made plenty of investing mistakes in recent years
I’d say he’s made the right call more often than you do…
They made 2.8 billion. Plenty of folks still love gm trucks and they are making a bundle on every one that “goes over the curb”.
Without taxpayers money gm stays stagnant to the stockholders. Thankfully I didn’t buy any!
results are out. wall street isn’t impressed.
Earnings were OK, forward guidance sucked…
Toyota made over 9 billion 😏
Soo why are you here 🤔..
gm lost 7 percent of its value today. Q2 was a disaster with 1.3 billion in recalls!!
61,000 bolts to be fixed at an estimated cost of over 11,000.00 per car. No chip resolution in sight. If you have a 120 grand you might get a Hummer someday and have to leave it outside. I would hate to be a Chevy line tech doing all that warranty work UGH!
Lowercase gm is rudderless. Mary’s BEV campaign is great for profits if people buy into questionable, unproven tech, but unfortunately, no one is… Maybe they should focus more on making and developing vehicles in markets that consumers actually want.
You call it rudderless, yet there is a very clear strategy in place to grow GM’s current business while expanding into new areas including EVs, AVs / robo taxi and logistics.
Just face it: you’re nothing more than a bear, much like Wall Street. But they’ll come around once the results are in.
He is not a bear… He’s a troll… and Wall Street are not bears for GM, of 13 analysts that cover GM 11 rate the stock a buy, and have price targets over $65, the other 2 have GM a Hold with price targets of $55. Some of the robot analysts rate GM a sell due to chart fundamentals, but they are using an algorithm that is for companies like Tesla where the stock is volatile and there is huge volumes traded.
GM stock is 80% held by institutions, only 20% is circulating the small investors and traders, which is why even when you see GM make a big move volumes are quite low compared to other stocks. Yesterday GM stock moved 10% but only 60 million shares traded, which is high for GM, but for a company with 1.5B shares outstanding, that is a relatively small volume traded on a day with a 10% move.