Al Root

It's been an interesting week for General Motors. It has culminated with a guidance cut that sent shares higher early Thursday

GM reported first-quarter numbers on Tuesday but delayed its earnings conference call because President Donald Trump was set to change automotive tariff policies later in the day.

The alterations came. The car business still faces stiff tariffs -- 25% levies on imported cars -- but things improved at the margin. Essentially, automotive tariffs won't stack on top of other tariffs placed on things such as steel and aluminum. There also was some relief for imported car parts.

The presidential update gave GM the ability to update its full-year guidance.

Now, GM expects operating profit of between $10 billion and $12.5 billion. The midpoint of $11.3 billion is lower than prior guidance of $14.7 billion, down 23%.

The new guidance includes total tariff impacts of between $4 billion and $5 billion in operating profit. GM imports about 45% of the cars it sells domestically, mainly from Mexico.

GM stock was up 3.5% in premarket trading, while S&P 500 and Dow Jones Industrial Average futures were up 1.3% and 0.8%, respectively. Certainty certainly helps. Coming into Thursday trading, GM stock has fallen 16% since the Nov. 5 presidential election.

The new guidance includes $3.5 billion earned in the first quarter. For the final three quarters of the year, with tariffs in place, GM expects to generate an operating profit of $7.8 billion, down 30% from the $11.2 billion implied by early guidance.

GM earned $11.1 billion in the final three quarters of 2024.

"We look forward to maintaining our strong dialogue with the administration on trade and other policies as they continue to evolve," said CEO Mary Barra in a news release. "As you know, there are ongoing discussions with key trade partners that may also have an impact. We will continue to be nimble and disciplined and update you as we know more."

Management hosts a conference call at 8:30 a.m. Eastern time to discuss results and the new guidance.

Write to Al Root at allen.root@dowjones.com

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May 01, 2025 08:12 ET (12:12 GMT)

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