A month has gone by since the last earnings report for General Motors (GM) . Shares have added about 6.9% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is General Motors due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.General Motors Q2 Earnings Top EstimatesGeneral Mo ...

Core Viewpoint - The article discusses three dividend stocks that are recommended for long-term investment, emphasizing the importance of reassessing these investments after five years due to potential changes in their respective industries and company performance [2]. Group 1: Ford Motor Company - Ford is one of the oldest car manufacturers in the U.S., but it has struggled with sales growth since the late 1990s and early 2000s [4]. - The company suspended its dividend in early 2020 due to the COVID-19 pandemic, highlighting the fragility of its dividend payments [6]. - Although Ford has reinstated a smaller dividend since 2022, investor confidence remains low, reflected in its forward-looking dividend yield of 5.3% and a P/E ratio of just over 8, which are significantly above and below industry norms, respectively [7]. - The automobile industry is evolving, and if Ford does not become more competitive by 2030, it may not be worth holding onto the stock long-term [9]. Group 2: Qualcomm - Qualcomm is recognized as a dividend payer with a forward-looking yield of 2.3%, and it has consistently increased its annual payout for decades [10]. - The company is positioned to benefit from the growing demand for AI-powered solutions, particularly in consumer technology, as the AI hardware market is expected to grow at an average annual rate of 26% through 2030 [14]. - Similar to Ford, Qualcomm's long-term viability will depend on its ability to remain competitive in the AI hardware market beyond 2030 [15]. Group 3: Verizon Communications - Verizon is one of the top three smartphone service providers in the U.S., controlling about one-third of the market, but it faces limited growth opportunities beyond population growth [16]. - The company generates strong cash flow, reflected in a forward-looking dividend yield of 6.3%, and has raised its dividend for 18 consecutive years [18]. - Verizon has a significant debt load of $124 billion, which could impact its financial health as interest rates rise, with $1.7 billion in quarterly interest payments against a net income of around $5 billion [19][20]. - The company's private 5G networking venture is seen as a potential growth engine, warranting further evaluation in the future [21].

Trade Performance - China's July exports increased by 8% year-on-year in RMB terms [2] - China's July imports increased by 4.8% year-on-year in RMB terms [2] - China's July trade surplus narrowed to 705.1 billion RMB [2] - China's July exports increased by 7.2% year-on-year in USD terms [2] - China's July imports increased by 4.1% year-on-year in USD terms [2] - China's July trade surplus was 98240 million USD [2] Import & Export Commodities - China's July fertilizer exports increased by 85% year-on-year, reaching 5704000 tonnes [1] - China's July rare earth exports increased by 21% year-on-year, reaching 59943 tonnes [1] - China's July automobile exports increased by 26% year-on-year, reaching 694000 vehicles [1] - China's July integrated circuit exports increased by 16% year-on-year, reaching 31840 million units [1] - China's July soybean imports increased by 18% year-on-year, reaching 11666000 tonnes [1] - China's July crude oil imports increased by 11.5% year-on-year, reaching 47204000 tonnes [1] - China's July copper ore and concentrate imports increased by 18% year-on-year, reaching 2560000 tonnes [1] - China's July coal imports decreased by 23% year-on-year, reaching 35609000 tonnes [1]

Financial Data and Key Metrics Changes - The operating profit for the fiscal first quarter was JPY 244.1 billion, a decrease of JPY 240.5 billion compared to the same period last year [2][4] - The full-year forecast for operating profit has been revised up to JPY 700 billion, an increase of JPY 200 billion from the previous forecast [2][4] - The net profit forecast for the year is JPY 420 billion, up by JPY 170 billion from the previous estimate [4][5] Business Line Data and Key Metrics Changes - Motorcycle operations achieved an operating profit of JPY 189 billion, an increase of JPY 11.3 billion year-on-year, driven by sales growth in South America [9] - The automobile segment reported an operating loss of JPY 29.6 billion, impacted by tariffs and nonrecurring expenses related to EVs [9][10] - Power Products segment saw a decline in sales, totaling 828,000 units, with growth primarily in Europe [6] Market Data and Key Metrics Changes - Unit sales for motorcycles reached 5.143 million, with significant growth in Brazil and Vietnam [6] - Automobile sales declined to 839,000 units, primarily due to decreases in China and other Asian markets [6] - The forecast for motorcycle unit sales remains at 21.3 million, while automobile sales are projected at 3.62 million [11] Company Strategy and Development Direction - The company aims to improve its earnings structure and expand profits despite ongoing uncertainties related to tariffs and policy changes [3] - There is a focus on localizing production in the U.S. to meet demand and mitigate tariff impacts [22] - The company is exploring collaborations with Nissan and Mitsubishi Motors to enhance business operations [62] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in the Chinese market, which has seen declining sales for 17 consecutive months, and emphasized the need for strategic adjustments [55][59] - The company remains cautious about the impact of tariffs and is actively monitoring the situation to adapt its strategies accordingly [20][64] - Future EV production timelines may be affected by recent losses and market conditions, with a focus on being prepared for the next fiscal term [80] Other Important Information - The company has acquired shares worth JPY 936.5 billion as part of its share buyback program [3] - The gross impact of tariffs has been revised to JPY 450 billion, reflecting ongoing assessments and adjustments [26][33] Q&A Session All Questions and Answers Question: Impact from tariffs and production strategy - Management confirmed that the reduction of tariffs from 25% to 15% is a positive development for the company, but uncertainties remain regarding future tariff applications [18][20] - The company plans to maintain a high local production ratio in the U.S. and may adjust production allocations to optimize operations [22] Question: Forecast assumptions regarding tariffs - The company has not significantly changed its assumptions regarding tariffs but is working closely with suppliers to understand the impacts [27][31] - The gross impact of tariffs has been adjusted based on detailed calculations, with expectations for a 15% tariff starting from September [33] Question: Sales decline in Asia and Europe - Management noted that competition from Chinese OEMs has intensified in Asian markets, affecting sales, and emphasized the need for hybrid model launches to regain market share [39][42] - In Europe, the company is reassessing its strategy due to historical production challenges and ongoing competitive pressures [42] Question: EV losses and pricing strategy - The company anticipates significant EV-related losses, with a total of JPY 250 billion expected for the fiscal year, impacting future production strategies [78][80] - Pricing strategies will be cautiously adjusted in response to market conditions and inflation trends, with ongoing monitoring of competitor pricing [66][69]

Financial Data and Key Metrics Changes - The operating profit for the fiscal first quarter was JPY 244.1 billion, a decrease of JPY 240.5 billion compared to the same period last year [3][5] - The full-year forecast for operating profit has been revised up to JPY 700 billion, an increase of JPY 200 billion from the previous forecast [3][5] - The net profit forecast for the year is JPY 420 billion, up by JPY 170 billion from the previous estimate [5][6] Business Line Data and Key Metrics Changes - Motorcycle operations achieved an operating profit of JPY 189 billion, an increase of JPY 11.3 billion year-on-year, driven by sales growth in South America [10] - The automobile segment reported an operating loss of JPY 29.6 billion, with sales impacted by declines in China and other Asian regions [10][11] - Power Products experienced a decline in North America and Asia, totaling 828,000 units sold, while Europe showed growth [7] Market Data and Key Metrics Changes - Unit sales for motorcycles reached 5.143 million, with significant growth in Brazil and other regions [7] - Automobile unit sales were 839,000, reflecting declines primarily in China and other Asian markets [7] - The forecast for motorcycle unit sales for the full year is maintained at 21.3 million, while automobile sales are projected at 3.62 million [12] Company Strategy and Development Direction - The company aims to improve its earnings structure and expand profits despite ongoing uncertainties related to tariffs and exchange rates [4] - There is a focus on localizing production in the U.S. to mitigate tariff impacts and enhance competitiveness [20][23] - The company plans to increase production capacity in Brazil to meet high demand, indicating a strategic emphasis on South American markets [57] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in the Chinese market, which has seen declining sales for 17 consecutive months, and emphasized the need for strategic adjustments [59][61] - The company remains cautious about the impact of tariffs and is actively engaging with suppliers to manage costs [34][36] - Future EV production timelines may be affected by recent losses and market conditions, with a focus on preparing for a launch in the next fiscal year [84] Other Important Information - The company has initiated a share buyback program amounting to JPY 1.1 trillion, with JPY 936.5 billion worth of shares acquired as of July 31 [4] - The forecast for the full-year dividend remains unchanged at JPY 70 per share [6] Q&A Session Summary Question: Impact from tariffs and production strategy - Management confirmed that the reduction of tariffs from 25% to 15% is a positive development, but uncertainties remain regarding the implementation details [20][22] - The company plans to maintain a high local production ratio in the U.S. and may adjust production shifts to increase output [23][25] Question: Tariff assumptions for the fiscal year - The company has revised its gross impact from tariffs to JPY 450 billion, reflecting detailed calculations and adjustments [29][30] - Management is working closely with suppliers to understand the implications of tariffs on parts and components [34][35] Question: Sales decline in Asia and Europe - The decline in sales is attributed to increased competition from Chinese OEMs and varying government subsidies for hybrid vehicles [43][46] - Management is focusing on launching hybrid models in markets where they have not yet been introduced to regain competitiveness [44] Question: EV losses and future production - The company expects EV-related losses to total JPY 250 billion for the fiscal year, with ongoing assessments of production strategies [82][84] - Management is cautious about the timing of the Zero series EV launch due to market conditions and IRA impacts [84] Question: Price hikes and forecast assumptions - Price hikes are being considered cautiously, with management monitoring inflation trends and competitor pricing strategies [71][72] - The company remains conservative in its forecasts, particularly regarding exchange rates and tariff impacts [73][76]

Fiscal First Quarter Ended June 30, 2025 Financial Results August 6, 2025 1 1 Summary Financial Results for Fiscal First Quarter Ended June 30, 2025 Operating Profit 244.1 bil. yen Motorcycles: Sales expanded in Brazil and Vietnam, achieving the highest operating profit. Automobiles: While tariff impacts and one-time expenses related to EVs were recorded, sales in North America remained strong. Operating cash flows after R&D adjustment 583.0 bil. yen Financial Forecast for FYE March 31, 2026 * Previous fore ...

Summary of Conference Call Records Industry Overview - **Industry**: Emerging Markets (EM) and Asia-Pacific (APAC) Equity Strategy - **Context**: The call discusses the implications of increased tariff rates on corporate profitability and market dynamics, particularly focusing on the US and its trading partners. Key Points Tariff Implications - **Tariff Rates**: The weighted average tariff rates on US imports are projected to exceed 18% starting from August 1, 2025, a level not seen in 92 years [1][7] - **US Import Tariffs**: Currently, less than 50% of US imports are subject to tariffs, up from under 30% prior to recent changes [1][26] - **Customs Revenue**: US customs revenues from import tariffs have increased significantly, with an annualized additional revenue of approximately USD 220 billion as of June 2025 [1][21] Corporate Responses to Tariffs - **Impact on Earnings**: US-based importers experienced a minor impact in the first half of the year due to pre-buying strategies but anticipate a larger hit in the second half [2] - **Mitigation Strategies**: Companies are managing tariff impacts through supply chain optimization, cost-sharing with suppliers, and implementing 'tariff surcharges' on end-customer prices [2] - **Sector-Specific Concerns**: Korean and Japanese firms have expressed significant concerns regarding tariff impacts [2] Market Reactions - **Earnings Cuts**: EM stocks with high US exposure (25% or more) have seen a consensus earnings cut of approximately 2.5-3% since March 31, 2025, while stocks with no US revenue exposure have remained stable [3][49] - **Stock Performance**: Stocks with higher US exposure have underperformed those without by about 4% during the same period [3][48] - **Market Sentiment**: There is a prevailing belief in the market that tariffs are temporary, leading to a lack of concern about tariff risks [3] Investment Strategy - **Market Selection Framework**: Tariffs are a significant theme in market selection, with a focus on companies with higher domestic exposure and lower US exposure [4] - **Geographical Focus**: The strategy is overweight on markets such as China, Brazil, Indonesia, Malaysia, and the Philippines, with projected upside of 7% for MSCI EM and 8% for MSCI AxJ by 2026 [4][9] Sector Performance - **Operating Profits**: Most EM manufacturing companies reported stable to upward momentum in operating profits, with 13% of MSCI EM revenue linked to the US [4][33] - **Sector Vulnerability**: The manufacturing sector is particularly vulnerable due to tightly knit global supply chains, with potential profitability pressures expected in the second half of the year [4] Company-Specific Insights - **Dixon Technologies (India)**: Reported a 10% import tariff impact on camera modules, with significant negative effects on margins [57] - **Hyundai Motor Co. (Korea)**: Anticipated a 39.5% drop in operating profit due to tariffs [57] - **Panasonic (Japan)**: Estimated a 1% impact on consolidated business profit for the second half of the year [57] - **NIDEC (Japan)**: Experienced a minor impact from tariffs, with management indicating that the overall effect is manageable [57] Additional Observations - **Tariff Uncertainty**: Companies across various sectors are facing uncertainty due to tariffs, leading to cautious spending and project delays [58] - **Hedging Strategies**: Some firms, like Arca Continental in Mexico, are employing hedging strategies to mitigate tariff impacts [58] Conclusion The conference call highlights the significant impact of rising tariffs on corporate profitability and market dynamics in the EM and APAC regions. Companies are adapting through various strategies, but concerns remain about the long-term implications of these tariffs on earnings and market performance.

Company Strategy & Performance - Lithia & Driveway (LAD) aims for 100% national coverage and high profitability, targeting $2 EPS per $1 billion of revenue[10] - The company's 10-year Revenue CAGR is 16%, and Adjusted EPS CAGR is also 16%[10] - LAD's platform expands access to a 70% larger market compared to traditional franchise auto dealers[17] Financial Highlights & Capital Allocation - In the first six months of 2025, LAD allocated $266 million to share repurchases at an average price of $316 per share[35] - LAD targets leverage ratios in the range of 2-3X, aiming for an investment-grade rating over time[35] - LAD's EBITDA for YTD 2025 is $11078 million, and Adjusted EBITDA is $8913 million[88] Driveway Finance Corporation (DFC) - DFC targets a portfolio size of $7 billion in 2025E and $17 billion in the mid-term[49] - DFC aims for finance operations income of $50-$60 million in 2025E and $150-$200 million in the mid-term[49] - DFC's originations in Q2 2025 reached $731 million with an APR of 87%[54] Operational Efficiency & Growth - Larger stores operate more efficiently, with the smallest 3rd of stores having SG&A as a % of Gross Profit at 88%, compared to 56% for the largest 3rd[26] - The company's M&A strategy targets a 5-year return of 15% CAGR[41] - Driveway generated an average of 13 million unique visitors per month in Q2 2025[82]

Financial Data and Key Metrics Changes - The company reported record revenue of $9.6 billion for the second quarter, reflecting a 4% year-over-year same-store revenue increase [6][12] - Diluted earnings per share (EPS) increased by 29% year-over-year, reaching $9.87, with an adjusted EPS of $10.24, marking a 2530% increase year-over-year [5][6] - Adjusted EBITDA for the second quarter was $489 million, a 20% increase year-over-year [26] Business Line Data and Key Metrics Changes - Same-store aftersales gross profit grew by 8.5% year-over-year, with gross profit margin widening to 57.8%, a 180 basis point increase from last year [20][21] - Financing operations income more than doubled year-over-year from $7 million to $20 million, supported by a 50 basis point expansion in net interest margin to 4.6% [24][25] - New vehicle units increased by 2% year-over-year, while used vehicle units increased by 4% year-over-year [18][19] Market Data and Key Metrics Changes - The company noted a 50% same-store sales improvement in value auto sales compared to last year [19] - The UK market showed a 3% year-over-year profitability increase, indicating resilience despite challenging industry conditions [36] Company Strategy and Development Direction - The company aims to scale high-margin adjacencies and deepen customer relationships while maintaining capital discipline [7][12] - Strategic acquisitions remain a core pillar of growth, targeting $2 to $4 billion in annual revenue from acquisitions [14][70] - The company is focused on improving store performance and expanding its digital reach to grow U.S. market share from 1.1% to 5% [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to grow profitably and take market share, despite pressures from lower gross profit units (GPUs) [7][12] - The evolving tariff landscape and broader consumer trends are being monitored closely [7] - Management highlighted the importance of operational efficiency and cost control in navigating current market conditions [23][24] Other Important Information - Over 60% of the company's net profit comes from aftersales operations, indicating a diversified earnings stream [8][21] - The company repurchased 3% of its outstanding shares in the first half of the year, with plans to continue aggressive buybacks [15][28] Q&A Session Summary Question: Can you discuss SG&A to gross profit leverage? - Management acknowledged the need for operational improvements and emphasized the focus on driving growth and productivity [34][35] Question: How is the UK market performing? - The UK operations showed a 3% year-over-year profitability increase, with effective cost management in place [36][37] Question: How does the U.S. SG&A look? - The U.S. business continues to perform well on the SG&A front, with ongoing focus on cost control [41][42] Question: What is the outlook for DFC growth? - DFC is on a growth trajectory, with expectations for continued strong performance in the coming quarters [48][49] Question: How much of the aftersales growth is due to last year's issues? - Over 50% of the stronger same-store sales growth in aftersales can be attributed to lapping last year's CDK issues [75] Question: How will tariffs impact pricing? - Management indicated that manufacturers are already adapting to mitigate tariff impacts, and the company is well-positioned to manage these changes [98][100]

Financial Data and Key Metrics Changes - Reported GAAP EPS was a loss of $1.34 per share, while adjusted EPS for the second quarter was $2.19 per share, representing a 49% increase year over year [5] - Consolidated total revenues reached a record of $3.1 billion, up 6% year over year, with consolidated gross profit growing 12% and adjusted EBITDA increasing 22% [6] Business Line Data and Key Metrics Changes - Franchise Dealership segment generated record revenues of $3.1 billion, up 6% year over year, driven by a 5% increase in same store new retail volume and a 10% increase in same store fixed operations revenues [6] - Same store new vehicle gross profit per unit (GPU) was $3,391, down 6% year over year but up 10% sequentially [7] - EchoPark segment reported revenues of $509 million, down 2% year over year, but achieved a record gross profit of $62 million, up 22% year over year [10] - Powersports segment generated record revenues of $48.1 million, up 21% year over year, with gross profit increasing 17% [11] Market Data and Key Metrics Changes - Same store fixed operations gross profit increased by 12% year over year, with warranty gross profit up 34% and customer pay gross profit growing 9% year over year [9] - EchoPark segment retail unit sales volume increased by 1% year over year, with total GPU reaching a record of $3,747 per unit, up $669 year over year [10] Company Strategy and Development Direction - The company remains focused on a diversified growth strategy across franchise dealerships, EchoPark, and powersports segments to enhance revenue and shareholder returns [13] - The acquisition of four Jaguar Land Rover dealerships is expected to contribute approximately $500 million in annualized revenues, positioning the company as the largest Jaguar Land Rover retailer in the U.S. [12] Management's Comments on Operating Environment and Future Outlook - Management noted that while there are uncertainties due to tariffs, they have not seen a material impact on vehicle pricing to date [14] - The company is optimistic about the second half of the year, with expectations of improved performance in July and beyond [18] - Management expressed confidence in the EchoPark business model and its potential for disciplined long-term growth [10][21] Other Important Information - The Board of Directors approved a 9% increase in the quarterly cash dividend to $0.38 per share, payable on October 15, 2025 [13] - The company ended the quarter with $775 million in available liquidity, including $210 million in cash and floor plan deposits [12] Q&A Session Summary Question: What surprised you the most in Q2? - Management noted that the business picked up nicely in the back half of July, which was unexpected given the tariff noise [18] Question: How do you view lease returns impacting your business? - Management indicated that lease returns are at a low point now, and as they increase, it will significantly benefit used vehicle inventory and sales volume [24] Question: Can you elaborate on the changes in your F&I agreements? - Management explained that they renegotiated positions with product providers, leading to cost savings and improved margins [36] Question: How did new vehicle GPU trend throughout the quarter? - New vehicle GPU was stronger at the beginning of the quarter, with figures around $3,600 in April, dropping to approximately $3,300 by June [40][42] Question: What are your expectations for new vehicle SAAR trajectory? - Management suggested that the SAAR could be in the range of 15 million to 16 million, depending on interest rates and market conditions [64]