The second-quarter results for Detroit automakers are highly anticipated on Wall Street, with General Motors expected to shine brighter than its counterparts. Analysts predict a strong adjusted profit of $2.75 per share for GM, representing a 44.2% increase from the previous year. Additionally, GM is forecasted to report $45.46 billion in revenue, up by 1.6% from the prior period. In contrast, Ford Motor’s adjusted earnings per share for the second quarter are expected to decline by 5.2%, with automotive revenue projected to increase by 3.8% to $44.02 billion.
Several Wall Street analysts are optimistic about GM’s performance in the second quarter, with expectations that the automaker will guide toward the higher end of its already raised guidance for 2024. This positive outlook is driven by factors such as favorable pricing and volume/mix benefits for Ford, along with GM’s advantage from easy cost comparisons. Analysts anticipate both companies to raise their 2024 guidance, reflecting a strong quarter ahead.
Evercore analyst Chris McNally is particularly bullish on GM over Ford, citing lower pricing as a contributing factor. While Ford is also expected to have a solid second quarter, it is likely to align with the upper half of its 2024 guidance. Ford’s guidance includes adjusted earnings before interest and taxes between $10 billion and $12 billion, as well as free cash flow ranging from $6.5 billion to $7.5 billion. On the other hand, GM’s 2024 guidance projects adjusted earnings of $12.5 billion to $14.5 billion, with adjusted automotive free cash flow expected to be between $8.5 billion and $10.5 billion.
Stellantis, a major player in North America and Europe, faces a different set of challenges compared to its rivals. While the automaker is expected to report an adjusted operating profit for the first half of the year, concerns linger over its North American operations. CEO Carlos Tavares acknowledged past mistakes that have led to sales declines and bloated inventories in the region, posing challenges for the company. Despite these hurdles, Stellantis remains committed to its 2024 guidance, which includes a double-digit adjusted operating income margin and positive industrial free cash flow.
Shares of Stellantis have experienced a decline of more than 12% in 2024, contrasting with the upward trends seen in GM and Ford. Tavares highlighted key issues affecting Stellantis, such as slow vehicle inventory turnover, manufacturing challenges, and weaknesses in marketing strategies. However, the company’s finance chief, Natalie Knight, reaffirmed Stellantis’ commitment to its shareholders, promising capital return and a positive financial outlook.
As GM, Ford, and Stellantis prepare to unveil their second-quarter results, investors are keen on updates regarding their electric vehicle initiatives, capital spending strategies, and inventory levels in the U.S. Despite some challenges, analysts remain optimistic about the earnings potential of Detroit automakers, emphasizing the industry’s resilience and pricing dynamics amid evolving market conditions. The future of Detroit automakers in 2024 is poised for growth and innovation, with each company navigating unique opportunities and challenges in the competitive automotive landscape.