Ford (F) announced it will exit Russia ahead of its earnings report to be released late Wednesday. Ford earnings come after warning earlier in the third quarter and a day later general engines (GM) beat its third-quarter earnings outlook and supported key targets for the full year. Both GM stock and Ford stock rose.
Along with earnings, auto industry forecasts are also under close scrutiny. Investors and industry watchers are preparing for signs of weak demand as interest rates rise and recession fears increase. But on Tuesday, GM CEO Mary Barra said “demand remains strong”, echoing similar statements from both GM and Ford management in early October.
Ford’s EV presentation will share the spotlight when it reports after closing. GM on Tuesday reaffirmed its commitment to acceleration in electric cars, but turned down a key EV target. tesla (TSLA).
Traditional automakers are making a bold and costly transition to electric vehicles. EV change comes as it faces many challenges, from continued chip shortages to a tough global macroeconomic outlook.
Ford on Wednesday said it would exit Russia after finalizing a deal to sell its stake in a joint venture there. In March, Ford suspended operations in Russia following the invasion of Ukraine.
Predictions: Wall Street sees Ford’s earnings fall from 47% to 27 cents per share. Revenue increased 5% to $37,464 billion.
Results: Check back on Wednesday after the market closes.
Appearance: Wall Street sees Ford earning $1.98 per share, up 24% for the full year.
Shares were up 1.4% on Wednesday, gaining 2.8% to 12.83 on Tuesday. On Monday, Ford shares regained their 21-day average after rising 4.5% last week. Ford stock fell below the 50-day and 200-day lines.
On December 20 in September, Ford warned of third-quarter profits, citing thousands of missing vehicles and another $1 billion in unexpected costs due to supply problems and inflation. However, Ford maintained full-year earnings guidance, hoping to complete and ship these vehicles as needed parts arrive in the current fourth quarter.
The automaker grew its Q3 US new-vehicle sales by 16%, it said in October. He said that demand remains strong and orders are expanding rapidly.
The EV strategy will focus on the Ford earnings call.
Ford reported 47% higher Mach-E sales in September. But General Motors said Tuesday that the old Bolt EV was selling Ford’s Mach-E, a cornerstone of the company’s EV goals, at a “two-to-one ratio” that month.
Ford is also facing a weakening European economy, particularly in commercial sales. Rival GM left Europe in 2017.
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General Motors Earnings
Predictions: Analysts polled by FactSet expect General Motors’ earnings per share to rise 23% to $1.88, with revenue jumping 57% to $42.086 billion.
Results: GM earnings rose 48% to $2.25 per share. Revenue increased 56% to $41.889 billion.
The automaker previously reported that third-quarter U.S. new-vehicle sales rose 24%. He said on Tuesday that EV share in the US market rose to 8% in Q3 thanks to record Bolt EV sales.
Appearance: Despite the big third-quarter beat, General Motors still sees full-year EPS of $6.50-7.50. 25-30% higher wholesale volumes and $7 billion-9 billion in automotive free cash flow remain to be expected.
Wall Street is now seeing full-year GM earnings per share of $7.10, up 0.4%.
In a letter to shareholders Tuesday, GM CEO Mary Barra said the automaker is maintaining its full-year guidance despite a challenging environment. “Demand for GM products remains strong and we are actively managing the headwinds we face,” she wrote.
But GM pushed back a key target for EV sales. It now expects to deliver 400,000 EVs in North America by mid-2024 instead of 2023. The Wall Street Journal noted that there was a delay in increasing the company’s EV battery production.
General Motors shares rose 2.7% to 38.02 in the stock market today, after reversing the 50-day moving average on Tuesday.
GM stock rose nicely to Q3 earnings, surpassing its 21-day moving average on Friday after exiting Oct. 10 low. It is below the 200-day average.
Technically, General Motors stock has a bottom of 50 days and over 200 days with 42.46 buy points.
Tesla stock gained 5.3% on Tuesday, rising above its 10-day average but falling below long-term averages.
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EV Transition Through Challenges
On November investor day, Barra said in a letter to shareholders on Tuesday that GM will discuss “rapid scaling of our EV portfolio.”
The EV disaster they are planning for General Motors and Ford is very important.
GM aims to deliver 400,000 EVs in North America by 2024. However, the expensive new Hummer and Lyriq EV models sold less than 500 units last quarter, with the older but refurbished Chevrolet Bolt model accounting for the bulk of EV sales.
The automaker plans to increase Bolt EV production by about 60% next year, the automaker said on Tuesday. In 2023, GM also plans to launch the first all-electric versions of the Silverado truck, Blazer SUV and Equinox SUV crossover from the well-known Chevrolet brand.
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