According to Refinitiv, GM is expected to report a second-quarter adjusted profit of $2.23 per share and revenue of $30.9 billion. 

Those figures would set a new second-quarter operating profit record for the company, surpassing its adjusted earnings before interest and taxes of $3.9 billion, or $1.86 per share, in 2016. They would also add to GM’s three-quarter earnings streak of records. In the third quarter of last year, the company set an all-time operating profit record of $5.3 billion, or $2.83 per share.

As of Tuesday’s close, they had risen nearly 40% to $57.88 per share in 2021. Investors will be looking at other aspects of the automaker given the solid profit expectations over subdued results a year ago.

Earnings

Due to continued strong demand, better-than-expected results at GM Financial, and improved near-term production from the pull forward of semiconductors from the third quarter, the company expects its first-half EBIT-adjusted to be between $8.5 billion and $9.5 billion. This is an increase from a $5.5 billion forecast earlier this year.

Investors will be looking for any additional information about the second half of the year and the global semiconductor chip shortage. Jacobson stated that when the company reports its second-quarter results, it will provide new year-ahead guidance.

GM previously forecast adjusted pretax earnings of $10 billion to $11 billion, or $4.50 to $5.25 per share. The net income for the year is expected to range between $6.8 billion and $7.6 billion.

GM previously stated that the semiconductor chip shortage would reduce earnings by $1.5 billion to $2 billion and free cash flow by $1.5 billion to $2.5 billion. When it announced “better-than-expected” earnings for the second quarter, it declined to update this guidance.

“I think a lot of people thought it was going to be over in the first half of 2021,” Jacobson said. “It’s obviously longer than that.”

He expects the problem to persist into 2022, but it’s unclear how significant the consequences will be next year. He stated that the third quarter will most likely be impacted more than the company anticipated a few months ago.

GM confirmed on Tuesday that its three North American full-size pickup truck assembly plants would close next week due to a global semiconductor chip shortage.

General Motors Financial

GM Financial has been a driving force for the automaker during the coronavirus pandemic, with new and used car prices and financing reaching all-time highs. This is due to a shortage of vehicles caused by a chip shortage. GM Financial, according to Jacobson, was a “integral part” of the company’s record earnings.

The financial arm earned $1.2 billion before interest and taxes in the first quarter and paid a $600 million dividend to GM. In May, Jacobson predicted that GM Financial’s dividends this year would “significantly exceed the $800 million dividend paid in 2020.”

EVs/AVs\

Jacobson stated in June that the increase was due to the company’s strong earnings. He stated that GM is “finding more ways to deploy more money faster” into the two emerging markets. The additional funds will be used to expand its EV rollout. By 2025, GM expects to sell more than one million electric vehicles per year.

Investors will be interested in any updates to its EVs, including a Hummer pickup truck due later this year, or Cruise, its majority-owned autonomous vehicle subsidiary.

The next “big milestone for Cruise,” according to Jacobson, will be transporting non-employees in its self-driving vehicles.

Cruise secured a new $5 billion line of credit in June as it prepares to commercialize its self-driving ride-hailing business.

Dividend

GM and Ford Motor have not restated their dividends since suspending them early last year to conserve cash as the coronavirus pandemic caused rolling plant shutdowns around the world.

Ford CFO John Lawler said Monday that the automaker’s dividend could be reinstated “as early as the end of this year,” depending on how the semiconductor chip shortage affects the rest of the year.

Some investors will want to know if GM will provide an update on a potential timeline for dividend reinstatement.