General Motors and Ford Motor Company are scheduled to release third-quarter financial results this week, and Wall Street is predicting both companies will miss 2022 profit forecasts.
“Although there has not been a significant erosion in automotive demand so far this year, 2023 weakness appears increasingly likely,” analysts at Berenberg wrote.
The Zack Consensus Estimate for GM’s third-quarter earnings and revenues is $1.91 per share and $41.83 billion, respectively. Estimates have been revised down 13 cents over the past 30 days. Bottom-line projections indicate a year-over-year decline of 25.6%, while top-line estimates imply growth of 56.2% year-over-year.
As for Ford, the company is expected to post quarterly earnings of $0.37 per share in its upcoming earnings call, and revenues are expected to be $37.68 billion, up 13.5% from a year ago.
Ford warned investors that supply chain and logistical challenges would cause third-quarter earnings to fall short of expectations. Shares have plummeted 19% since that announcement. GM has seen a similar decline, with shares dropping 19% since mid-September.
Tesla also saw shares fall after announcing it might not reach its goal of increasing vehicle deliveries by 50% this year. Meanwhile, used car retailer, CarMax, warned of softening demand.
“First it was Ford, then CarMax, then Tesla. 3Q should see many more misses and weak outlooks added to the mix. Don’t call us bulls (yet),” wrote Morgan Stanley analyst Adam Jones.
Neither GM nor Ford has altered its full-year profit guidance yet. Executives are pointing to high demand and low inventories as a factor that will continue to drive sales through the end of the year.
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