General Motors Company (NYSE:GM) shares fell almost 7% after the automaker reported a drop in profit for the second quarter due to new global tariffs.
The company reported adjusted earnings before interest and taxes (EBIT) of $3 billion, down from $4.4 billion in the same period last year, attributed to a net tariff impact of $1.1 billion.
This overshadowed a beat on earnings per share (EPS), with GM reporting $2.53, down from $3.06 in the year-ago quarter but above estimates of $2.35.
Revenue of $47.1 billion, down 2% year-over-year, was also ahead of the Street consensus of $46.4 billion.
GM also maintained its full-year guidance, continuing to expect adjusted EBIT in the range of $10 billion to $12.5 billion and adjusted EPS between $8.25 and $10.
Analyst at Wedbush noted the automaker's "strong beats on the top and bottom lines while reaffirming its fiscal year 2025 bottom-line guidance as the company continues to navigate the complex tariff landscape."
They noted that the impact of tariffs is expected to impact GM’s second half more than the first half.
“Despite continued concerns around profitability given the rising tariff situation leading to a $4 billion to $5 billion gross tariff impact, the company continues to make solid progress with mitigating at least 30% of these costs through manufacturing adjustments, targeted cost initiatives, and consistent pricing,” they wrote.
“While the company saw a significant profitability headwind due to the tariff impact, the company expects the Q3 net impact to be higher than Q2 due to the timing of indirect tariff costs, while the second half of this year will be subject to two quarters of tariffs.”
The analysts also welcomed GM reaffirming what it described as relatively stable guidance across the top and bottom lines as it seeks to ramp up deliveries of new models and stabilize the bottom line through improvements to its business model to offset the tariff impact.
“While the tariff headlines continue to put further pressure on the bottom-line for the foreseeable future, we believe [CEO Mary] Barra & Co continues to impressively navigate the complex backdrop successfully while seeing continued high demand for its entire fleet of EVs and ICE vehicles,” Wedbush concluded.
Investors appeared less convinced, with GM shares trading down 6.9% just shy of $50 in early trade on Thursday.