General Motors Q2 earnings on deck: What to expect

General Motors (NYSE:GM) is set to report second quarter results on Tuesday, before markets open.

Wall Street expects the Detroit, Michigan-based automaker to post EPS of $2.69, while revenue is expected to rise 1% at $45.16 billion during the quarter.

The company faces pressure from supply chain issues, shrinking sales in the Chinese market and higher competition from other legacy automakers.

Moreover, slower adoption of EVs amid a tough economic environment has led to the company backing away from its previously announced forecast that it would have one million units of electric vehicle production capacity in North America by the end of 2025.

Yet, consistent pricing power and demand from its established brands provided helped the company stand its ground.

Wall Street analysts and Seeking Alpha’s Quant ratings are both positive on the company and rated it a Buy and above. However, Seeking Alpha analysts are cautious and consider it a Hold.

Earlier in April, General Motors Q1 results easily beat expectations with revenue over a billion dollars more than estimates, fuelled by gains in its North America sales. The company also raised its FY24 profit guidance above Wall Street forecasts.

Over the last two years, the company has beaten EPS estimates 100% of the time and has beaten revenue estimates 88% of the time.

The stock gained nearly over 10% since its first quarter results. Overall, it has risen nearly 39% so far this year, outperforming the 17% rise in the broader S&P500 Index.

General Motors said it anticipates new product launches and further cost efficiencies will help improve profitability during the second quarter.

“Despite the lack of growth, thanks to the good profitability, and excellent management of working capital, GM is poised to continue to deliver solid returns to its shareholders in the coming years,” pointed out Seeking Alpha analyst Davide Zappa.

Over the last three months, EPS estimates have seen 16 upward revisions and no downward revisions, while revenue estimates have seen seven upward revisions versus four downward moves.