New GMC trucks are displayed on the sales lot at Hanlees Hilltop GMC in Richmond, California, on July 2, 2024.
Justin Sullivan | Getty Images
General Motors is set to report second-quarter earnings before the bell Tuesday, as investors watch for how President Donald Trump’s auto tariffs will affect the automaker’s results and for any updates to full-year guidance.
While automakers have been hoping for relief on tariffs, Trump’s 25% levies on imported vehicles and many auto parts remain in effect.
Amid the uncertainty, GM is trying to counter tariff risks. Last month, the company announced it will invest $4 billion in several American plants, including moving or increasing production of two Mexican-produced vehicles to U.S. plants. The company also said last week it will move production of a gas-powered SUV and add manufacturing of pickup trucks to its home state of Michigan.
While GM said in May that it still believes it can mitigate at least 30% of its expected cost increases due to tariffs, it also lowered its 2025 earnings guidance to include a possible $4 billion to $5 billion impact from auto tariffs. The company said in the spring that its guidance took into account changes the Trump administration made to tariffs, which include reimbursing automakers for some U.S. parts and reducing the “stacking” of tariffs on one another for the industry.
GM CEO Mary Barra declined to say at the time whether the company planned to raise vehicle prices because of the tariffs.
Here is what Wall Street is expecting, according to average estimates compiled by LSEG:
- Earnings per share: $2.44 adjusted
- Revenue: $46.4 billion
Those results would mark a 3.3% decrease in revenue compared with a year earlier and a 20.3% decline in adjusted earnings per share. GM’s second quarter of 2024 included $47.97 billion in revenue, net income attributable to stockholders of $2.93 billion and adjusted earnings before interest and taxes of $4.44 billion.
The company’s full-year guidance, which it modified in May due to tariffs, includes adjusted earnings before interest and taxes of between $10 billion and $12.5 billion, down from its former guidance, which did not take tariffs into account, of $13.7 billion to $15.7 billion.
GM’s yearly outlook also includes net income attributable to stockholders of $8.2 billion to $10.1 billion, down from $11.2 billion to $12.5 billion, and adjusted automotive free cash flow between $7.5 billion and $10 billion, down from between $11 billion and $13 billion.
Investors will also be listening on Tuesday for commentary on GM’s commitment to electric vehicles.
Trump’s new tax-and-spending bill, which he signed into law on July 4, is set to end the $7,500 tax credit for new electric vehicles and $4,000 credit for used EVs after Sept. 30.
As a result of ending the tax credits, a Barclays research note last week predicted a slower introduction of EV models across the auto industry, while a Deutsche Bank note anticipated a pull-forward of EV sales for automakers in the third quarter.
While GM initially set a goal to exclusively offer EVs by 2035, it has since said that consumer demand, which has been slower than expected, will dictate its EV plans.
GM’s stock remains rated overweight with a price target of $56 per share, according to average estimates compiled by FactSet.
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