GM Q1 2022 Earnings: Here’s What To Expect And Watch
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Update: GM has reported its earnings for the first quarter of 2022. See our report outlining GM Q1 2022 financial results.
General Motors will report its first-quarter 2022 earnings at market close today, April 26th, 2022. The GM Q1 2022 earnings will give investors, stakeholders, and fans insights on many topics. Here’s what we expect from the earnings.
Expectations
The GM Q1 2022 earnings report will cover the results for the three months of January, February and March 2022. The operating environment has become ever more erratic over the past few months, particularly since the last time GM leadership interacted with investors during the last earnings report in January.
On average, analysts estimate GM earnings to drop 26 percent to $1.66 per share, despite a 14 percent rebound in revenue to $36.87 billion, according to FactSet data. For the year, analysts peg GM earnings to come in at $6.72 per share during the complete 2022 calendar year, down five percent year-over-year.
Sales
In January, GM projected that it could improve sales volume by 25 to 30 percent over 2021 levels while forecasting a $2.5 billion rise in commodity and logistics costs. The Detroit-based automaker also said that it expected to earn between $13 billion and $15 billion in pretax profit.
However, ongoing disruptions to the supply chain, the war in Ukraine, plus rising interest rates and inflation across the U.S. pose a threat to these forecasts.
Specifically, supply chain disruptions have slowed vehicle production. This was offset in 2021 by higher vehicle prices, removing some of the financial impact on a short-term basis. But rising interest rates could sway consumers into no longer being able to pay more for the same vehicles.
GM China sales fell 21 percent while GM sales in the U.S. were down 20 percent during the first quarter of 2022. While China is GM’s biggest market globally by sales volume, the automaker realizes the lion’s share of its profit from its home market.
We’ll be closely watching GM’s guidance on chips, other supplies, and production.
Product
General Motors is currently undergoing several key vehicle launches, including the GMC Hummer EV Pickup, refreshed 2022 Silverado 1500 and 2022 GMC Sierra 1500 full-size pickups as well as the Cadillac Lyriq, the luxury marque’s electric vehicle offensive. In January, The General revealed the Chevy Silverado EV – the first fully-electric Silverado.
Key to The General’s electric vehicle offensive is managing costs related to those vehicles, particularly as key parts – including microchips – remain in short supply.
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 announced an internal objective to have a fully-electric portfolio by 2035.
Stock
GM shares have experienced a sharp downturn thus far in 2022, shedding 37 percent or $22 in value thru April 26th, 2022. The impact of inflation and its resulting effects on consumer spending, coupled with a lack of key supplies and instability on a global level, seems to have chilled the hopes and expectations of investors.
The General is somewhat shielded from many of these macro effects by pivoting 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 electric vehicles, since they tend to be more technologically advanced than their internal combustion engined counterparts, necessitating more semiconductors as a result.
GM Authority will be here to bring you coverage of GM Q1 2022 earnings later today, so be sure to check back and subscribe for more GM financial news and around-the-clock GM news coverage.
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At 38 dollars a share it’s over valued.