Column: Automakers fail to impress with latest earnings reports

One of the enduring images from the 2012 Olympics in London — at least in the world of social media — was gymnast McKayla Maroney disappointedly receiving a silver medal instead of the gold everyone thought she would win.

As the 2024 Olympics opened in Paris last week, a number of major automakers reported billions of dollars in profits, yet Wall Street responded with the stock market equivalent of the "McKayla is not impressed" meme.

Shares of General Motors, Ford Motor Co., Stellantis and Tesla all dropped double-digit percentages in the days after the companies posted their latest results. Nissan shares fell 7 percent after its lowest quarterly profit in three years. Ford, which revealed $800 million in surprise warranty costs, had its single worst trading day since November 2008, when the Detroit 3 were on the brink of collapse.

Unlike that bleak era of automotive history, when GM and Chrysler were begging for a bailout and Tesla had just released its first electric vehicle, there are still plenty of profits to be had. But they are getting harder to come by, amid headwinds that include slower-than-expected EV demand, ballooning inventories and manufacturing snags.

That has made investors skittish and analysts frustrated. GM, upon reporting record second-quarter and first-half revenue, was rewarded with a downgrade from Morgan Stanley. Even Tesla CEO Elon Musk wasn't able to distract shareholders from a 45 percent drop in quarterly net income with promises to solve autonomy and churn out humanoid robots.

Top executives, who recognize that keeping investors happy is a big part of their job, largely predicted better results in the second half of the year. As they try to deliver on that guidance, they — and the board members they serve — know that Wall Street will be watching. So will we.