General Motors Company slumped in Tuesday’s premarket session after reporting a sharp drop in adjusted EBIT margins to 6.4% and a whopping $1.1 billion tariff headwind.
The auto behemoth registered second-quarter adjusted earnings per share of $2.53, beating the analyst consensus estimate of $2.40. Quarterly sales of $47.12 billion outpaced the Street view of $45.57 billion.
Net sales in the Automotive segment totaled $42.869 billion, lower than $44.060 billion in the year-ago period.
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In the U.S. market, the company’s market share rose to 17.4% for the second quarter of 2025, a 0.7 percentage point increase year-over-year. For the first half of 2025, U.S. market share stood at 17.3%, growing at a rate that outpaced the overall industry, according to the company press release.
“In the United States, we continue to lead the industry in full-size trucks and SUVs, and the 10 all-new or redesigned crossover SUVs we have introduced like the Chevrolet Trax, Buick Envista, and GMC Acadia took huge leaps forward in design and technology, resulting in record demand and revenue growth, while reduced complexity contributed to stronger profitability,” said CEO Mary Barra in the company’s letter to shareholders.
Adjusted EBIT margin contracted to 6.4% in the quarter under review from 9.3% in the year-ago period. Adjusted EBIT decreased to $3.037 billion from $4.438 billion primarily due to a net tariff impact of $1.1 billion, with minimal mitigation offsets. Net income margin contracted to 4% from 6.1%.
The firm expects the third quarter net tariff impact to exceed that of the second quarter, driven by the timing of indirect tariff costs. The heavier weighting of these costs in the third quarter will result in a higher overall net impact.
“In China, the performance of our new energy vehicles has been especially strong, and in the second quarter, we reported our second consecutive quarter of year-over-year sales growth,” Barra added. “We gained the most share among foreign OEMs, and we reported positive equity income.”
In June, the firm announced $4 billion of new investment in U.S. assembly plants to add 300,000 units of capacity for high-margin light-duty pickups, full-size SUVs, and crossovers.
The CEO highlighted that this development will “unmet customer demand, greatly reduce our tariff exposure, and capture upside opportunities as we launch new models.”
The capacity begins coming online in just 18 months, after which General Motors plans to build more than 2 million vehicles in the U.S. each year.
The company exited the quarter with cash and equivalents worth $22.381 billion, higher than $19.872 billion as of December 31, 2024.
Outlook
General Motors affirms FY25 adjusted earnings per share guidance of $8.25-$10.00 versus $9.17 analyst estimate.
General Motors is keeping its full‑year 2025 guidance unchanged while planning to offset at least 30% of the $4 billion–$5 billion gross tariff impact.
It will achieve this mitigation equally through manufacturing adjustments, targeted cost initiatives, and consistent pricing.
Price Action: GM shares are trading lower by 2.43% to $51.77 premarket at last check Tuesday.
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