GM shares: GM revenues due to cruises that allow for driverless trips
General motors (GM) tees up to report for the last quarter of 2021, with Ford Motor (F) also due after Tesla (TSLA) warned that headwinds may persist this year. GM shares continued to rise from several months’ lowest level.
On Tuesday, GM is likely to offer guidance for 2022 along with revenue results. Investors want to know about the car giant’s prospects for total production and electric vehicles, after the global chip shortage hit car production and sales. Last Wednesday, Tesla (TSLA) beat Q4 impressions, but said chip supplies were “the most important limiting factor” and supply problems could continue through 2022. Tesla is generally seen to have managed semiconductors and other supply constraints more efficiently than some rival automakers.
Car manufacturers are switching to electric and autonomous vehicles (EVs and AVs) in the middle of the chip shortage. On Tuesday, GM̵[ads1]7;s cruise mobility venture announced that it will “soon” open for self-driving cars in San Francisco. Japan’s Softbank Vision Fund is also investing a further $ 1.35 billion in Cruise, the AV startup said. The fund originally invested $ 900 million in Cruise in 2018. Providing driverless tours to an often skeptical audience is a milestone for any AV company.
GM revenue
Estimate: Wall Street expects GM earnings to fall 40% to $ 1.16 per share. Revenue drops 5% to $ 35.752 billion, but improves over Q3’s 25% decline, according to FactSet.
Results: Came back late Tuesday.
Outlook: Analyst predicted 2022 EPS of $ 6.93 with revenue of $ 153.97 billion, says FactSet. That would be compared to expectations of $ 6.83 throughout 2021.
In the fourth quarter, GM’s vehicle deliveries plunged 43% year-over-year in the US and plummeted 23% in China, the car giant has already said. For the whole of 2021, deliveries in the US fell by 13% and China’s deliveries fell by 0.3%. At a milestone, Toyota overtook GM as the new American sales king last year.
Vehicle supply rather than demand weighs on sales. General Motors reported record low inventories into Q4, with chip shortages persisting but improving as the quarter progressed.
Offset by weak sales, GM’s average transaction prices continue to rise. Average US prices in the fourth quarter of 2021 rose by $ 8,608 compared to a year ago to $ 53,788 per vehicle, according to Edmunds.
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GM action
Shares of General Motors rose 1.5% to 53.50 in Tuesday’s trading. It rose almost 5% on Monday after falling 6% last week. The GM stock has failed in an eruption in early January over 65.28, while undercutting its 10-week and 40-week lines, with no new buying point in sight. Last week, the GM stock reached its lowest level since September, and its relative strength is lagging behind, according to the MarketSmith chart analysis.
Shares of Ford, which reported late Thursday, rose 1.2% to 20.53 on Tuesday. The Ford stock has also fallen below the 10-week line, but is still above the 40-week line. Ford rounded out a double-digit gain from an entry in late December, a sell signal.
Tesla (TSLA) fell 1.2% after a jump of almost 11% on Monday. Stellantis (STLA) – which owns Fiat, Chrysler and Peugeot – received 0.9%.
Toyota shares, which found support on Friday on their 50-day line near the top of an earlier consolidation, fell 1.2% intraday. Toyota’s sales in the United States fell 5% in January compared to a year earlier, it was said on Tuesday.
Ford, Stellantis, Toyota and many other car manufacturers are launching January sales in the US this week, but not GM or Tesla.
EV And AV Shift
In January, General Motors unveiled the first all-electric version of its best-selling vehicle, the Chevy Silverado pickup, a key $ 35 billion investment in electric and autonomous vehicles (EVs and AVs). By 2025, GM plans to launch 30 new electric cars globally. It aims to become fully electric by 2035.
The exclusive Cadillac Lyriq will be launched in late spring.
The global chip shortage, driven by the coronavirus pandemic, cost automakers $ 210 billion in lost revenue in 2021, with 7.7 million fewer vehicles rolling out of production lines, estimates consulting firm AlixPartners.
Both GM and Ford idled or closed key plants, including those that make some of their most popular and profitable vehicles. While coping through the chip crisis, GM focused on maximizing the production of its money spinners: full-size trucks and SUVs, including the Silverado.
But no one knows for sure how long the chip shortage will last. It can slow down car manufacturers’ EV and AV shifts because increasingly smart electric vehicles need more semiconductors than gas or diesel cars.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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