Mary Barra, CEO, GM at NYSE, November 17, 2022.

Source: NYSE

DETROIT — General Motors is set to report its second-quarter earnings before the bell on Tuesday.

The Detroit automaker is expected to post solid results, driven by favorable industry trends of high new vehicle prices and increased sales and production.

Here’s what Wall Street expects, according to the Refinitiv consensus:

  • Adjusted earnings per share: $1.85
  • income: $42.64 billion

These results would mean a sharp year-over-year increase in adjusted earnings per share of about 62% and sales of 19%.

Some Wall Street analysts believe GM could raise its outlook for the second time this year on stronger-than-expected second-quarter vehicle sales and prices. However, the company may remain conservative due to potential challenges during the second half of the year, including softening prices and contract negotiations with the United Auto Workers union.

GM previously issued forecasts for 2023 of adjusted earnings between $11 billion and $13 billion, or $6.35 to $7.35 per share, and adjusted auto free cash flow between $5.5 billion and $7.5 billion. Net profit should be between 8.4 and 9.9 billion dollars.

When reporting his April results for the first quarter, the automaker increased its adjusted profit and free cash flow metrics, but lowered its forecast net income due to $875 million in special charges related to the previously announced employee buyout program during the quarter.

GM shares are up about 16% this year. They closed Monday at $39.30 a share — off a 52-week high of $43.63 a share set in February.

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GM shares

In addition to earnings, investors will look forward to any updates on GM’s plans for new electric vehicles for the rest of the year, including fully electric versions of the company’s Chevrolet Blazer and Equinox crossovers and Silverado pickup truck. The company is also set to unveil an all-electric version with its flagship SUV, the Cadillac Escalade.

The automaker also can provide more information on what is expected to be a challenge to the UAW contract negotiations. The talks, backed by a long-standing national labor movement, new management and record company profits, are expected to be among most controversial in recent memory.

Negotiations between the union and GM officially began earlier this month, Ford Motor and Stellantis.

“Recently initiated UAW negotiations are a critical focal point for Ford and GM in 2H,” Barclays analyst Dan Levy said in a note to investors on Monday.

During the last round of negotiations in 2019, a breakdown in negotiations between GM and the UAW led to a nationwide 40-day strike against the company. GM announced a strike it cost about $3.6 billion that year.

Current contracts expire on September 14. The agreements affect roughly 150,000 UAW members who work for the automakers.

This story is evolving. Please check for updates.

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