Ford Earnings On Deck After GM Affirms Outlook Despite ‘Headwinds’

Ford (F) is on deck to report late Wednesday after previously warning on the third quarter. Ford earnings also arrive after General Motors (GM) merely maintained full-year profit guidance on Tuesday following a Q3 earnings beat. GM stock and Ford stock popped Tuesday.

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In a letter to shareholders Tuesday, GM CEO Mary Barra said the automaker was maintaining 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.

Traditional automakers are making a bold and costly shift to electric vehicles, chasing Tesla (TSLA). The shift comes while they face multiple challenges, from inflation to chip shortages and a deteriorating macroeconomic outlook .

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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 after the market close.

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

Ford Stock

Shares rose 2.9% to 12.84 Tuesday. On Monday, Ford stock climbed 2.4%, 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. However, Ford maintained full-year earnings guidance, expecting to complete and ship those vehicles in the current Q4 as necessary parts arrive.

The automaker grew Q3 U.S. new vehicle sales 16% and said Oct. 4 that demand remains strong and orders are rapidly expanding.

Its EV strategy will be in focus on the Ford earnings call.

Ford saw 47% higher Mach-E sales in September, but General Motors said Tuesday that its older Bolt EV outsold Ford’s Mach-E “by more than two to one” that month.

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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.

The automaker previously reported that its Q3 U.S. new vehicle sales grew 24%. It said Tuesday that its EV share in the U.S market climbed to 8% in Q3 thanks to record Bolt EV sales.

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 rose 3.7% to 37.04 on the stock market today, reclaiming the 50-day moving average.

GM stock had rallied nicely into Q3 earnings, topping its 21-day moving average Friday after coming off Oct. 10 lows. It remains 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 5.3% Tuesday, rising above the 10-day average but below longer-term averages.

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EV Transition Amid Challenges

For General Motors and Ford, their planned EV ramp is key.

GM aims to deliver 400,000 EVs in North America through 2023. But its pricey new Hummer and Lyriq EV models sold less than 500 units combined last quarter, with an older but refreshed Chevrolet Bolt model comprising the bulk of its EV sales.

Next year, the automaker plans to increase Bolt EV production by nearly 60%, it said Tuesday. In 2023, GM also plans to launch 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.

Meanwhile, 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 rates and inflation.

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