General Motors (GM) Stock Plunges Over 7% as Tariff Fears Eclipse Q2 Beat
Warning! GuruFocus has detected 2 Warning Sign with GM.
General Motors (NYSE:GM) reported adjusted EPS of $2.53, topping analysts' $2.45 estimate, but revenue declined 1.8% year?on?year to $47.12 billion. The sales drop in key North American and China markets raised questions about demand resilience.
The company held its full?year EPS guidance at $8.25$10, down from $11$12 earlier this year. That caution, coupled with fresh warnings that U.S. import duties could create a $4 billion, $5 billion headwind in Q3 and Q4, weighed on the shares.
GM plans to offset roughly 30% of the tariff impact through factory shifts, targeted cost cuts, and price adjustments, but investors remain skeptical those measures will fully protect margins.
CEO Mary Barra highlighted in the shareholder letter that GM is positioning itself to adapt to new trade and tax policies and a rapidly evolving technology environment. Still, longer production lead times and higher component costs under current trade tensions could further pressure profitability.
Beyond tariffs, GM's push into electric vehicles and software services, key for future growth, requires continued heavy investment. The automaker expects to launch several new EV models through 2025, but higher R&D and capital spending may keep earnings under pressure.
For now, concerns over trade costs and slowing top?line growth have overshadowed the company's quarterly beat and cast doubt on near?term margin stability.
This article first appeared on GuruFocus.
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