GM expected to report Q2 EPS of $1.85 on revenue $42.64B, Ford expected to report Q2 EPS 54c on revenue of $40.23B General Motors (GM) is scheduled to report quarterly results before market open on Tuesday, July 25 with a conference call scheduled for 8:30 am EST, while Ford (F) is scheduled to report after market close on Thursday, July 27, with a conference call scheduled for 5:00 pm EST. What to watch for:
GM SALES: In July, General Motors reported the company and its dealers delivered 691,978 vehicles in the U.S., up 19% year-over-year, in 2Q23 and 1,295,186 vehicles in the U.S., up 18% year-over-year, in the 1H23. "All four of GM's brands delivered double-digit year-over-year increases in the second quarter, GM Envolve continued its growth with fleet customers and the company expanded its truck leadership," GM stated. GM also reported the company and its joint ventures delivered over 526,000 vehicles in China in Q2, up 9% from a year earlier.
GM PARTNERSHIPS, INITIATIVES: In April, GM Ventures led a $50M Series B financing round in EnergyX and entered into a strategic agreement to develop EnergyX's lithium extraction and refinery technology. Nanoramic Laboratories also announced in April that GM Ventures made a strategic investment in the energy storage and advanced materials company. Additionally in April, GM and Samsung SDI announced a plan to invest more than $3B to build a new battery cell manufacturing plant in the United States that is targeted to begin operations in 2026. The company also announced joining the Eclipse Foundation in April and contributing "uProtocol" as "a starting point for greater standardization, enabling increased software productivity across the automotive industry." GM announced in May the launch of GM Envolve, a "one-stop customer experience," to make it easier to tap into all the products and services GM has to offer. The company also announced an all-electric Cadillac Escalade and signed a teaming agreement with Black Sage Technologies in May. In June, General Motors and POSCO Future M announced the second phase of their Ultium CAM joint venture, an investment projected to exceed $1B to increase production capacity of CAM in North America. GM also announced a plan to invest over $1B in two of its Flint, Michigan sites and $280M in truck production at Oshawa Assembly. ArcelorMittal (MT) North America also announced in June it will supply General Motors with XCarb recycled and renewably produced steel. Additionally in June, GM announced plans to invest over $500M in Arlington Assembly and adopt the Tesla (TSLA) charging standard for next-generation electric vehicles. The company also announced a $632M investment in its Fort Wayne assembly plant and entered an agreement with Element 25 to expand the EV supply chain.
ACQUISITIONS: In June, General Motors announced that it has acquired substantially all the assets of Israel-based battery software startup ALGOLiON for an undisclosed sum. "The acquisition was led by the newly formed Technology Acceleration and Commercialization organization, a group within GM that works to identify emerging technology that can support GM's leadership position in battery development through investments, acquisitions or partnerships," GM stated.
ANALYST VIEW: In July, Mizuho analyst Vijay Rakesh raised the firm's price target on General Motors to $40 from $37 and kept a Neutral rating on the shares. The firm said that after a strong start to the year, it sees potential for strong auto sales momentum, specifically for electric vehicles, despite headwinds from a stretched consumer and high interest rates. The analyst sees GM as a growing player in the EV space but expects gross margin headwinds from its transition.
Additionally in July, Citi analyst Itay Michaeli raised the firm's price target on General Motors to $89 from $85 and kept a Buy rating on the shares. The analyst also opened a "30-day positive catalyst watch" on the shares ahead of the Q2 report. The firm maintains a more constructive stance on U.S. automaker stocks following its recent vehicle density survey and sees GM as having the "most compelling Q2 setup." Consensus estimates for GM have risen, but there remains "ample upside" from strong North America pricing, the analyst said.
FORD SALES: In May, Ford reported April U.S. sales up 4% versus last year to 184,002 vehicles. Total SUV sales were down 11.3% to 82,367, while total truck sales were up 21% to 96,493 vehicles and car sales were up 17.2% to 5,142 vehicles. In June, Ford reported May U.S. sales up 10.7% versus last year to 170,933 vehicles. The total included 5,444 electric vehicles, 10,715 hybrid vehicles and 154,774 internal combustion vehicles. In July, the company reports Q2 U.S. sales up 9.9% versus last year to 531,662 vehicles. "Ford was America's best-selling brand in the second quarter on the strength of its trucks, electric vehicles and new vehicle launches, posting sales gains of 11.2% for the quarter. Ford is now the best-selling brand and has the best-selling truck in America for six consecutive months this year. F-Series has been the best-selling truck in America for 46 years in a row," Ford stated.
FORD PARTNERSHIPS, INITIATIVES: In April, Ford announced the company would invest C$1.8B to retool its Oakville Assembly Complex and in May, it reopened order banks for its all-electric Mustang Mach E. Additionally in May, Ford entered into a long-term lithium hydroxide agreement with Nemaska Lithium and a binding lithium supply contract with EnergySource Minerals. The company also signed an agreement with Compass Minerals (CMP) for lithium carbonate and with Albemarle (ALB) for lithium hydroxide. Ford also announced a long-term lithium supply agreement with SQM (SQM) and a supercharger access agreement with Tesla in May. In June, Ford Next announced a collaboration with Uber (UBER) to deliver a new lease option for rideshare drivers going electric as well as a $2B investment in its Cologne Electric Vehicle Center. The company also announced in June an agreement with IperionX (IPX) for supply of titanium metal components and a $9.2B Department of Energy loan to build EV battery factories.
ANALYST VIEW: In July, Citi raised the firm's price target on Ford to $17 from $16 and kept a Buy rating on the shares. The firm maintains a more constructive stance on U.S. automaker stocks following its recent vehicle density survey. Consensus estimates for Ford have risen, but there continues to be upside primarily on strong volume and mix, the analyst said. The firm views the stock setup as slightly positive, saying another strong quarter should lead to upward estimate revisions and increased confidence in the company's execution.
