Update: GM has reported its earnings for the fourth quarter of 2021. See our report outlining GM Q4 2021 earnings.
General Motors will report its fourth-quarter 2021 earnings tomorrow, February 1st, 2021 at 4 PM Eastern Standard Time (EST). The GM Q4 2021 earnings will contain insights on many fronts relevant to investors, stakeholders and fans alike. Here’s what we expect from the earnings.
The GM Q4 2021 earnings report will cover the results for the three months of October, November and December 2021. Analysts expect a substantial decrease in earnings as GM faces a shortage of semiconductor chips, which have depleted vehicle inventories and sales volumes, while boosting profits. Based on FactSet data, analyst consensus currently calls for GM to report earnings of $1.16 per share (down 40 percent year-over-year) on revenue of $37.752 billion (down 5 percent year-over-year).
In 2021, GM warned that it expects its second half of the year to be weaker than the first six months of the year. In that scenario, the Detroit-based automaker expects to make $3.5 billion to $4.5 billion less during the second half of 2021 as a result of a rise in commodity costs of between $1.5 to $2 billion, lower wholesale volumes, and lower earnings from its captive finance arm, GM Financial. Offsetting weak sales are unexpectedly strong consumer demand and record vehicle pricing. In fact, GM’s average transaction prices continue to rise.
GM Q4 2021 sales in the U.S. fell 43 percent year-over-year and 23 percent in China. Both markets are the largest for General Motors, representing well over the majority of the automaker’s global sales, revenue and profit.
The downward performance in the U.S. and China is expected to substantially decrease GM revenue and associated profitability.
FactSet data forecasts 2022 Earnings Per Share (EPS) of $6.93 on revenue of $153.97 billion. That wouldn’t represent much of a change compared to Q4 2020, but would be quite a healthy increase from the trend during the fourth quarter of 2021.
What will impact GM’s outlook in the near- and medium-term future isn’t how many vehicles it can sell, but rather how many it can build. The automaker reported record low inventories entering Q4 2021.
General Motors has several key vehicle launches on the way, including the refreshed 2022 Silverado 1500 and 2022 GMC Sierra 1500 full-size pickups during the first quarter of 2022. From there, the Cadillac Lyriq will kick off the luxury marque’s EV offensive. And in January, The General revealed the Chevy Silverado EV – the first fully-electric Silverado.
GM’s plans call to launch 30 new EVs through 2025 globally as part of its $35 billion investment into electrification. The automaker has also shared internal plans to be fully-electric by 2035.
GM shares increased a healthy 36 percent during the 2021 calendar year, starting the year at $43.06 per share and closing it with $58.63. That’s despite the fact that GM has continued to struggle with chip shortages and production interruptions, idling several GM plants in the process. GM pivoted to maximize production of its most popular and profitable products: full-size trucks (Chevy Silverado and GMC Sierra) and SUVs (Chevy Tahoe and Suburban, GMC Yukon, and Cadillac Escalade).
At this point, it’s unclear exactly how long the chip shortage will last, though some expect it to remain well into 2022. This could very well lead to a slower adoption rate of EVs, since electric vehicles tend to be more advanced than their counterparts with internal combustion engines, and therefore typically need more semiconductors as a result.