GM pulls forecast due to tariffs as nervous consumers rush to buy
DETROIT — General Motors on Tuesday pulled its annual forecast, in a move that reflects the uncertain effects of US President Donald Trump’s global trade war, even as the company reported strong quarterly results.
In an unusual move, the automaker pushed its investor call to Thursday as it wanted to wait before commenting on changes to tariff policy.
Trump on Tuesday is set to soften the impact of auto tariffs through an executive order after automakers pressed their case with the administration, officials said. GM’s shares fell nearly 1 percent Tuesday.
The company in January forecast net income between $11.2 billion and $12.5 billion for 2025, which did not include the impact of automotive tariffs.
Trump’s vacillating tariff policy has caused uncertainty in the auto sector, with analysts estimating that new car prices could rise by thousands of dollars.
Don’t rely on past info
“The future impact of tariffs could be significant,” GM chief financial officer Paul Jacobson said on a call with the media. “We’re telling folks not to rely on the prior guidance, and we’ll update when we have more information around tariffs.”
The automaker’s costs were up $400 million from a year ago owing to higher labor and warranty expenses, Jacobson said, even though “the underlying business is still performing pretty well”.
GM’s quarterly results were partly hurt by fewer wholesale deliveries of the profitable full-size pickups and SUVs because of several weeks of downtime at assembly plants for upgrades and a January supplier fire, Jacobson said.
The company is pausing its share buyback activity, pending more clarity on the economic situation. It had in February decided to repurchase $2 billion of shares by the first half of this year.
“The banks are still closing that out … they’ll finish that in the second quarter,” Jacobson said.
Evercore ISI analyst Chris McNally backed GM’s move to pull its annual guidance as the tariff uncertainty looms, while CFRA Research analyst Garrett Nelson said news related to tariff modification could buffer potential losses.
GM revenue rose 2.3 percent to $44 billion in the first quarter, boosted by customers rushing to buy before prices rise, surpassing expectations of $43 billion.
Adjusted earnings per share of $2.78 beat estimates of $2.74. Net income fell 6.6 percent to $2.8 billion.
