GM Q2 earnings preview: Street hoping for boosted guidance on strong sales

　　Investors are expecting a strong second quarter from GM (GM) when the automaker reports before the bell on Tuesday, following strong sales of the automaker's gas-powered vehicles, trucks — and even EVs.

　　For the quarter, GM is expected to report revenue of $45.51 billion, higher than last quarters $43 billion, and a nearly 2% rise compared to a year ago ($44.7 billion). In terms of profit, GM is expected to book $2.70 in adjusted earnings per share, translating to adjusted net income of $3.05 billion and operating profit of $3.83 billion.

　　Following its strong Q1 results in April, GM lifted its 2024 guidance, with the company now expecting full-year adjusted EBIT (earnings before interest and taxes) of $12.5 billion to $14.5 billion, up from an outlook of $12 billion to $14 billion previously. Adjusted earnings are expected to come in between $9 and $10 per share in 2024. An upbeat Q2 report could mean GM will guide toward the higher end of its forecast or even boost full-year guidance for a second time this year.

　　The company had backed away from its initial big EV plans of 400,000 EVs by 2024, with CFO Paul Jacobson revealing at a Deutsche Bank conference in June that GM now expects to produce 200,000 to 250,000 EVs this year, slightly lower than the 200,000 to 300,000 unit plan.

　　Still, Jacobson told Yahoo Finance at the conference, “We're picking up significant [EV market] share; we sold over 9,500 EVs in North America [in May].” The Chevrolet Blazer and Cadillac LYRIQ EV had really strong gains, Jacobson added.

　　However, just last week, GM CEO Mary Barra indicated that GM‘s target of being able to produce 1 million EVs in North America by 2025 is in jeopardy. “We won’t get to a million just because the market is not developing, but it will get there,” Barra said at a CNBC CEO Council event. “Were going to be guided by the customer.”

　　Nevertheless, GM sales in the second quarter are boosting the companys bottom line at the right time, and EV sales that Jacobson alluded to are strong as well.

　　In the quarter, GM delivered 696,086 vehicles in the US, up 0.6% year over year, its best since the fourth quarter of 2020. GM also said it was the sales leader in full-size pickups, and EV sales hit a record as well.

　　GM said it delivered 21,930 EVs in Q1, up 34% over the previous quarter—and a 40% jump from a year ago. Despite pushing back on its original EV plans, GM still said it will have 10 EV models in the market by the end of the year.

　　Still, some analysts believe GM may be a bit too ambitious with its EV rollout.

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　　“While GM's sales exceeded estimates, aided by improved dealer inventory levels, we continue to have concerns about near-term execution risk as it attempts to ramp production of a handful of EV models featuring its Ultium platform,” CFRA analyst Garrett Nelson wrote in a note to clients earlier this month. “In short, we continue to believe a healthy dose of investor skepticism toward the GM story is justified.”

　　Nelson has a Hold rating and a $38 price target on GM.

　　Correction: A previous version of this article listed an incorrect spelling of Garret Nelson's name. We regret the error.