Al Root

General Motors reported solid second-quarter earnings amid a challenging operating environment.

GM on Tuesday reported an operating profit of $3 billion and earnings per share of $2.53 from sales of $47.1 billion. Wall Street was looking for an operating profit of $2.9 billion and earnings per share of $2.33 from sales of $46.3 billion, according to FactSet.

Guidance for the full year was unchanged. GM still expects 2025 operating profit of between $10 billion and $12.5 billion. The "gross" impact from tariffs is still expected to be $4 billion to $5 billion, with GM hoping to offset "at least" 30% of it through "manufacturing adjustments, targeted cost initiatives, and consistent pricing."

Shares were down 2.8% in premarket trading at $51.73 as results were released, while S&P 500 and Dow Jones Industrial Average futures were down less than 0.1%.

This is breaking news. Check back for updates. Read a preview of GM's earnings report below.

Tariffs, tax credits, and consumer demand will all be on investors' minds when General Motors kicks off automotive earnings season with its Tuesday morning second-quarter earnings report. It's a big moment for a stock that has done surprisingly well despite the turbulence.

It's a high-stakes quarter with government policies putting the entire industry into flux.

For the quarter, Wall Street is looking for GM to report an operating profit of $2.9 billion and earnings per share of $2.33 from sales of $46.3 billion, according to FactSet. A year ago, in the second quarter of 2024, GM reported an operating profit of $4.4 billion and EPS of $3.06 from sales of $48 billion.

Part of the reason for lower earnings is tariffs on imported cars. In 2024, about 45% of the cars GM sold domestically were imported, mainly from Mexico and South Korea. In May, GM said the net tariff impact in 2025 would be about $4.5 billion, or roughly $1.5 billion per quarter.

Investors will be looking for an update to that number as well as overall guidance. Currently, GM expects its 2025 operating profit to land between $10 billion and $12.5 billion. GM earned $14.9 billion in 2024.

Investors will also want to hear about EV sales. The federal $7,500 purchase tax credit is being phased out in September as part of President Donald Trump's recently passed tax and spending bill. That could create a rush to buy EVs in the third quarter and an air pocket for demand in the fourth.

The loss of the tax credit and tariffs is putting pressure on vehicle affordability. "Inventory for new cars under $30,000 -- a segment where 92% of vehicles are imported -- has shrunk for three consecutive months, " said Cars.com in its July industry report.

Higher prices can put pressure on new car sales, which were surprisingly strong in the first half of 2025. GM's U.S. sales rose 12% year over year. Some of that demand, however, might have been pulled forward by changing policies.

Investors will look to GM management to figure out just how much and what the second half of 2025 will look like.

Options markets imply the stock will move about 5%, up or down, following earnings. Shares have moved about 8% following the prior four earnings reports, rising once and falling three times over that span.

Coming into Tuesday trading, GM stock was roughly flat year to date, but up 22% over the past three months.

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

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

July 22, 2025 06:32 ET (10:32 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.