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: Ford, GM earnings preview: How well did they manage supply-chain snags?

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Ford Motor Co. and General Motors Co. are scheduled to report third-quarter earnings on Wednesday, with all eyes on how the two legacy auto makers dealt with supply-chain constraints.

GM
GM,
-0.19%

reports before the bell and has a call scheduled with investors to discuss results at 10 a.m. Eastern. Ford
F,
-2.03%

reports after the bell, with its call set for 5 p.m. Eastern.

Both auto makers have announced ambitious plans to offer more electric vehicles and continue to invest in autonomous vehicles.

Their third-quarter reports come on the heels of Tesla’s, which last week announced record quarterly profit and sales but also warned that supply-chain challenges have prevented it from running its factories at full speed.

Tesla
TSLA,
+12.37%

stock zoomed to another record high this week and the company was close to a $1 trillion valuation.

See also: Tesla sets sights on $1 trillion valuation after Hertz’s plan to buy 100,000 Tesla EVs

Tesla has been the most valued U.S. car maker for a while now, with its more than $980 billion valuation contrasting with a market cap of $62 billion for Ford and $83 billion for GM.

What else to expect:

Earnings: Analysts polled by FactSet expect Ford to report adjusted earnings of 27 cents a share, which would compare with adjusted EPS of 65 cents in the third quarter of 2020.

GM is seen posting an adjusted profit of 98 cents a share, which would compare with an adjusted profit of $2.78 a share a year ago.

Estimize, a crowdsourcing platform that gathers estimates from Wall Street analysts as well as buy-side analysts, fund managers, company executives, academics and others, expects Ford to report adjusted EPS of 30 cents.

For GM, the Estimize consensus is of adjusted EPS of $1.09.

Revenue: The analysts polled by FactSet are calling for sales of $37.7 billion for Ford, slightly up from sales of $37.5 billion a year ago. Estimize expects sales of $37.8 billion for Ford.

Sales at GM are seen at $30.7 billion, down from $35.5 billion in the third quarter of 2020. The Estimize forecast is for sales of $31.6 billion.

Stock price: Ford shares have gained about 82% this year, compared with gains of around 22% for the S&P 500 index, and recently rallied to their highest in six years. GM stock has added 38% this year.

What else to expect: Analysts will keep an eye on any news about the all-electric version of Ford’s iconic F-150 pickup truck, including fresh reservation numbers.

See also: More electric pickup trucks are coming to market. The question now is who will buy them?

Ford is also one of the investors on Rivian Automotive Inc., which has filed for an initial public offering and started selling a limited number of its R1T, a two-row, five-seat pickup truck, in September.

Wall Street has turned more optimistic on Ford, with Credit Suisse recently declaring that Ford’s “cycle of quarterly earnings disappointments” appeared to be in the past for the auto maker.

GM earlier this month unveiled plans to double its annual revenue to about $280 billion by the end of the decade in a transition to “an all-electric future.” Chief Executive Mary Barra vowed to transform GM from “auto maker to platform innovator.”

Emmanuel Rosner with Deutsche Bank said he expects both car makers to beat consensus expectations, with both enjoying “several potential catalysts on the horizon.”

Ford’s autonomous-driving unit Argo AI has indicated it wants to go public next year, “providing potential path to monetization for an asset that we sense investors
underappreciate,” he said.

GM’s catalysts include the unveiling of its high-volume Chevy Silverado electric at CES in January, and initial commercial deployment of Cruise robo-taxis, he said. Cruise has an event day scheduled for Nov. 4.

GM is also managing its core business well amid a “fading” cycle in North America, analysts at B. of A. Securities said in a recent note.

The company is accelerating efforts to “future-proofing the business with the development of the necessary components of the future of mobility services, including an autonomous electric vehicle fleet … car sharing (Maven), and connectivity (OnStar), may provide upside,” the B. of A. analysts said.

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