-
Tariffs can eat billions from the revenue of car manufacturers.
-
General Motors recorded a strong first quarter and recorded estimates of toppings.
-
However, it paused further stock shopping and pulled guidance.
All eyes and ears Automobile manufacturer‘Revenue is an appeal to help companies try to bring up tips and details on how to ease tariffs. The Trump administration has implemented tariffs, including 25% collection on imported vehicles, extending to auto parts imported in May.
There was a stage in that setting and there were three important takeaways here. General Motors‘ (NYSE: GM) An impressive first quarter.
Where would you invest $1,000 now? Our team of analysts revealed what they believe 10 Best Stocks Buy now. Continues “
Investors knew that General Motors had a strong quarter after seeing the sales report, but its financial results were not disappointing. General Motors reported $2.78 Earnings per shareeasily topped with an analyst estimate for $2.70. Revenues have increased to $44.02 billion, with analysts exploring revenue of $42.85 billion.
The bad news is that tariffs are predicted to cause great pain. According to Baron’sanalysts predict that the impact of tariffs on GM’s profit range is between 30% and 100% of operating profit. This is a serious business.
Management hopes that there will be a Crystal Ball to predict the impact of tariffs, but General Motors chose to draw previous guidance as there is no certainty on the topic.
“We believe the future impact of tariffs is important, so we are reevaluating the guidance and looking forward to sharing more when it becomes clearer,” GM CFO Paul Jacobson said in a media call. “We can’t rely on previous guidance. We’ll be back in the market as soon as we get it.”
The good news is that the potential impacts can be devastating, Wall Street Journal On Monday, the Trump administration reported that it is expected to ease the impact of car rates. The automotive industry can certainly use remedies as supply chains are globalized, complex and spend a huge amount of time and effort to fundamentally change to avoid tariffs.
In equally positive news, Jacobson also commented that the automakers believe they can offset 30% to 50% of North American tariffs.
One of the things General Motors has been doing very well in recent years is to buy back undervalued stocks at a high percentage. In late 2023, the company announced a $10 billion buyback and earlier this year announced a $6 billion permit. In fact, GM has dramatically cut its stocks over the past decade, and as you can see, the stock price has responded positively.
