Welcome to the Daily 5 report for Tuesday, Oct. 21.
So it's earnings time for General Motors today, Tesla Inc. tomorrow and Ford Motor Co. on Thursday. Earnings season inevitably generates debate about which numbers matter most. The actual results, guidance or expectations?
Earlier today GM said net income plunged 57 percent in the third quarter, yet its shares surged higher because GM said — and Wall Street investors believed — that profitability will improve in the coming months. GM's message won the Street.
Tomorrow we'll go through the same exercise with Tesla and CEO Elon Musk. Even if Tesla's numbers are lackluster, Musk's messages will take on more importance to Wall Street.
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As Laurence Iliff wrote in this Tesla earnings preview story, the EV maker could see thinner margins after discounting its aging lineup during the quarter. Demand is likely to soften following the Sept. 30 repeal of the U.S. EV tax credit, Iliff wrote.
"Tesla's core EV business faces intensifying competition and slowing demand," Zacks Investment Research said Oct. 20. "The third-quarter performance was solid, but largely mirrored broader industry momentum."
Musk is expected to address delays in Tesla's robotaxi deployment and development of its Optimus robot on the earnings call, our story says. Much of Tesla's incredible $1.5 trillion market valuation depends on those projects.
Musk, of course, remains the world's richest human, with a fortune estimated at $460 billion, according to the real-time Bloomberg Billionaires Index.
Questions are also expected about Musk's new compensation plan, which offers an unprecedented $1 trillion — yes, trillion with a T — incentive package if the CEO is able to hit all the future targets set by Tesla's board.
Back in Detroit, automakers still worry about billions, not trillions.
GM's market capitalization stands at about $63 billion. Ford is roughly worth $49 billion and Stellantis $32 billion. EV maker Rivian doesn't get the same kind of love as Tesla, either, and its market capitalization is a mere $16 billion.
In other news out of GM, the automaker is following the Stellantis playbook and leaving the future of a major assembly plant, CAMI in Ingersoll, Ontario, up for further review. GM plans to end production of its BrightDrop electric vans at the plant as the market for EV vans has struggled to gain traction, Lindsay VanHulle wrote.
That's it for now. If you want to view this story in your browser, click here.
— Philip Nussel, online editor
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