The General Motors second-quarter earnings report is due on August 4, 2021. Considering the previous quarterly report, this guide will forecast the company’s second-quarter earnings report.
On May 5, 2021, General Motors (NYSE: GM) posted earnings for its first fiscal quarter. The automaker announced first-quarter results that were fueled by exceptional price and neutral performance in the US, strong credit and residual value performance at GM Financial, and China’s industry rebound [1].
The company reiterated its earnings estimates for the fiscal year 2021 in the first quarter. Unadjusted net income for the first quarter was $3 billion, up from $294 million a year earlier, when automakers began closing operations to help manage early breakouts of the pandemic [2].
For the first quarter, the automaker earned $4.4 billion in adjusted pretax earnings, up from $1.3 billion the prior year. The automotive industry is now impacted by a global scarcity of semiconductor chips, which is affecting global output. The chip scarcity has forced automakers to close manufacturing plants for varied lengths of time around the world, resulting in low vehicle inventories on dealer lots. Reduced supplies, on the other hand, have resulted in higher earnings per vehicle, allowing automakers to thrive despite the shortfall. These estimates take into account the likely impact of the chip shortage, which included a $1.5 billion to $2 billion drop in earnings and a $1.5 billion to $2.5 billion drop in free cash flow.
In 2021, the company expects pretax revenues of $10 billion to $11 billion, or $4.50 to $5.25 per share, with adjusted free cash flow of $1 billion to $2 billion.
The car behemoth is expected to beat revenue estimates in the second quarter, but earnings may fall short.
The company has reported higher-than-expected earnings in each of the last four quarters, as well as higher-than-expected revenue in two of the last four quarters.
The first quarter brought in $32.5 billion in revenue for General Motors. As the business continues its comeback, revenues are unchanged from the same period the prior year. In the second quarter of FY2021, the momentum established in previous quarters is projected to continue. In the fiscal year 2021, GM expects total revenue of $136.5 billion.
GM Stock Analysis
Following its last strong breakout in January, GM stock has been trading sideways for the past six months.
The stock of General Motors fell as much as 18% to a low of 52.63 on July 19. However, that low point was within 1% of the 9-day moving average for GM stock, indicating a lack of momentum.
A seven-week consolidation has resulted in a 64.40 resistance for GM shares. However, if the GM stock breaks above its down-sloping trend line from the early June high, we may see some demand.
While the early-June breakout effort failed, GM stock has remained comfortably above the 46.81 support level, which it cleared on January 12 [3].
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Adnan Abdul Rehman
Market Analyst
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