GM(US:GM) Hua Er Jie Jian Wen·2025-07-23 04:01Core Viewpoint - General Motors reported second-quarter earnings that exceeded analyst expectations, but warned that future tariff impacts will significantly worsen, overshadowing the positive earnings news and leading to a substantial drop in its stock price [1][4]. Financial Performance - In the second quarter, General Motors faced tariff costs of up to $1.1 billion, with a forecast indicating that the negative impact from tariffs will intensify in the second half of the year, particularly in Q3 [1][4]. - Revenue for the second quarter decreased nearly 2% year-over-year to approximately $47 billion, while adjusted EBIT fell 32% to $3 billion [4][6]. - Adjusted earnings per share dropped from $3.06 in the same quarter last year to $2.53, although this was still above analyst predictions of $2.44 [4][6]. Market Performance - Despite tariff pressures, General Motors' core business remained strong, with a 7% increase in U.S. vehicle sales driven by high demand for profitable pickup trucks and SUVs [4][5]. - In China, the company reversed last year's losses and achieved a small profit due to increased sales of electric vehicles [4][5]. Strategic Adjustments - To mitigate the impact of escalating trade pressures, General Motors is actively adjusting its strategy, reaffirming its full-year adjusted core profit forecast of $10 billion to $12.5 billion [6]. - The company aims to offset at least 30% of tariff impacts through cost-cutting and strategic adjustments, maintaining its estimate of tariff costs between $4 billion and $5 billion for the year [6]. - General Motors announced a $4 billion investment plan for new factories in the U.S. to strengthen domestic manufacturing and reduce reliance on imports, aiming to increase production capacity for key high-margin models by 300,000 units [6][7]. Future Outlook - CEO Mary Barra expressed confidence in the company's long-term electrification goals despite uncertainties in the electric vehicle market, emphasizing the importance of profitable electric vehicle production as the company's guiding principle [5][6].