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(excerpt)

GM reports on Wednesday before the bell, Ford reports Thursday after the bell.

The auto makers’ results come on the heels of another blowout quarter for U.S. competitor Tesla Inc., which posted a surprise GAAP and adjusted profit last week.

“The outlook for the auto industry was souring before COVID-19 shut down plants,” said David Kudla, CEO of Mainstay Capital Management.

By the end of 2019, investors and many in the industry feared that 2020 sales wouldn’t be on par with sales in recent years, which were banner times for auto sales.

“There is no doubt that auto makers suffered a substantial hit during the second quarter, but proactive balance sheet actions have allowed these companies to bear the brunt of this shutdown without crippling them,” he said in a note. …

… For GM, investors will keep a keen eye on the second-quarter cash burn and the current capital structure, Mainstay’s Kudla said.

The quarter’s burn was forecast to be between $7 billion and $9 billion, but that figure is likely better on the back of better-than-expected late second-quarter sales, he said. …

 

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