General Motors reported a 32% drop in second-quarter core profit to $3 billion, as escalating tariff-related costs took a significant toll on earnings. The largest U.S. automaker by sales said tariffs reduced its results by $1.1 billion in the quarter and warned that the impact is likely to worsen in the third quarter.
Revenue for the quarter ended June 30 fell nearly 2% year-on-year to $47 billion, while adjusted earnings per share dropped to $2.53 from $3.06 a year earlier. Despite the decline, GM still beat analyst expectations of $2.44 per share, according to LSEG data.
The company reaffirmed its full-year forecast of an adjusted core profit between $10 billion and $12.5 billion, despite the mounting trade pressures. GM estimates that tariffs could cut $4 billion to $5 billion from full-year profits, although it aims to mitigate about 30% of the impact. Analysts have noted the automaker may need to scale back future investments or reduce spending to manage the pressure.
While the tariff headwinds weighed heavily, GM’s core operations remained resilient. U.S. sales, a key profit center, rose 7% during the quarter, and strong pricing continued on pickup trucks and SUVs. The company also returned to profitability in China after posting a loss there a year earlier.
In June, GM announced a $4 billion investment in its combustion-engine operations at three U.S. plants in Michigan, Kansas, and Tennessee, including plans to boost production of the Cadillac Escalade and full-size pickups. The company’s increased focus on gasoline vehicles comes as EV growth slows and government incentives for electric models are set to expire at the end of September.