General Motors (GM) reaffirmed full-year profit guidance, as well as its commitment to electric vehicles, after easily beating third-quarter earnings estimates, while slightly missing on revenue. GM stock rose near a key level.

In a letter to shareholders Tuesday, GM CEO Mary Barra said the company maintained full-year guidance despite a challenging environment. “Demand continues to be strong for GM products and we are actively managing the headwinds we face,” she wrote.



GM also reiterated its plan to accelerate on electric cars. At an investor day Nov. 17, GM will discuss the “rapid scaling of our EV portfolio,” Barra said Tuesday.

Upcoming EVs in 2023, mainly from GM’s Chevrolet mainstream value brand, have been “incredibly well received” by customers and industry experts, Barra wrote in the letter to shareholders.

They are expected to drive “rapid EV adoption and conquest sales for GM, including in coastal markets,” Barra added. In coming years, the all-electric lineup will include relatively affordable Silverado pickup trucks and Equinox compact SUVs, as well as higher-end and luxury models.

In 2023, Bolt EV production will increase by nearly 60%, GM said Tuesday. The Bolt outsold “Ford’s Mach-E by more than two to one in September,” the letter to shareholders said.

The Mach-E is a spearhead of Ford‘s (F) own EV transition. Traditional automakers are making a bold and costly shift to electric vehicles, chasing Tesla (TSLA).

Ford earnings are due Wednesday after the automaker warned on Q3 in late September.

IBD Live: A New Tool For Daily Stock Market Analysis

General Motors Earnings

Estimates: Analysts polled by FactSet expected General Motors earnings per share to rebound 23% to $1.88 on a 57% revenue bounce to $42.086 billion.

Results: GM earnings rebounded 48% to $2.25 per share. Revenue bounced 56% to $41.889 billion.

On the back of record Chevy Bolt sales, GM’s share of the U.S. EV market reached 8% in Q3 from 4% the prior quarter.

Outlook: Despite the big Q3 beat, General Motors still sees full-year EPS $6.50-$7.50. It continues to expect 25%-30% higher wholesale volumes and automotive free cash flow of $7 billion-$9 billion.

Wall Street sees full-year GM earnings per share of $6.75, down 4.6%.

GM Stock

Shares of General Motors climbed 3.5% to 36.99 on the stock market today. On Monday, GM stock rose 2.1% following a 6.4% jump last week.

General Motors stock is trying to get back above the 50-day moving average, after topping its 21-day moving average on Friday. It remains well below the 200-day average.

Technically, General Motors stock has a bottoming base with a 42.46 buy point, above the 50-day and 200-day.

Tesla stock gained 5.1% Tuesday, rising above the 10-day average but below longer-term averages.

Demand, Supply Issues In Car Market

On Oct. 3, GM delivered a 24% surge in U.S. auto sales for the third quarter, touting “strong customer demand” and “modestly improving” vehicle inventories.

But concerns about the auto market and broader economy continue to grow. After chip and other parts shortages, worries about demand for new and used cars, as well as car loans, have increased amid rising rate and inflation.

Still, General Motors said in early October that the launch of three important new EVs in 2023 remains on schedule. Those will include the first all-electric versions of the Silverado truck, Blazer SUV and Equinox SUV crossover, all from its Chevrolet brand, which is known for value.

On Oct. 11, GM announced a new GM Energy business, offering electricity storage and management for homes and businesses. The move sharpened its rivalry vs. Tesla, which has big stakes in energy storage along with leadership in electric vehicles.

Ford Earnings

Estimates: Wall Street sees Ford earnings plunging 47% to 27 cents per share. Revenue is seen rebounding 5% to $37.464 billion.

Results: Check back Wednesday.

Outlook: Wall Street sees Ford earnings of $1.98 per share for the full year, up 24%.

Despite its Q3 warning on Sept. 20, Ford maintained full-year earnings guidance. The automaker grew Q3 U.S. auto sales 16% but delayed deliveries of some of its most profitable vehicles, expecting to complete and ship those vehicles in the current quarter as necessary parts arrive.

Ford Stock

Shares rose 3.2%  Tuesday. On Monday, Ford stock climbed 2.4% to 12.48, retaking the 21-day average. Shares popped 4.5% last week. Ford stock remains below the 50-day and 200-day lines.

On Sept. 20, Ford warned on Q3 profits, given thousands of incomplete vehicles and a billion dollars more in unexpected costs amid supply issues and inflation.

Since then, used-car retailer CarMax (KMX) and EV leader Tesla (TSLA) have given weak outlooks for vehicle demand and deliveries, respectively.

Auto supplier Dorman Products (DORM) plunged 6.8% Monday to a two-year low, despite an earnings and revenue beat. Allison Transmission (ALSN) and Gentex (GNTX) also report this week.


Warren Buffett Stocks: What’s Inside Berkshire Hathaway’s Portfolio?

Here Are The 5 Best Dow Jones Stocks So Far This Year

These Are The 5 Best Stocks To Buy And Watch Now

Stocks To Watch: Top-Rated IPOs, Big Caps And Growth Stocks

Find The Latest Stocks Hitting Buy Zones With MarketSmith

Source link