General Motors Co. (NYSE: GM) on Wednesday reported second quarter profit that beat analysts’ estimate, but the auto marker cut its 2018 outlook due to the impact of higher tariffs on steel and aluminum.
GM now expected diluted-adjusted earnings per share to be USD 6 for 2018, below its previous forecast of USD 6.30 to USD 6.60 per share. The Company said the expectation is affected by recent significant increases in commodity costs and unfavorable foreign exchange impact of the Argentine peso and Brazilian real. In May, the Trump administration imposed 25% tariffs on steel imports and 10% on aluminum imports from Canada, Mexico and the European Union. Steel and aluminum are two key raw materials for auto industry.
General Motors shares fell as much as 7% to USD 36.68 per share in the early trading on Wednesday.
“We faced significant external challenges but delivered solid results this quarter. The fundamentals of our business are strong and we remain focused on our plan – delivering great vehicles, developing technologies to transform personal mobility and creating long-term shareholder value,” said Mary Barra, Chairman and CEO.
In the second quarter, the Company posted revenue of USD 36.8 Billion. Net income rose 44% to USD 2.4 Billion. Excluding certain items, the Company earned USD 1.81 per share in the second quarter. The Company generated record operating income of USD 592 Million in China, driven by strong demand of Baojun and Cadillac brands.