Good morning. The income period takes some twists and turns.
General Motors' Q1 Earnings Call is set to take place on Tuesday, but the Auto Giant announced This will be postponed until Thursday, “based on recent reports on trade policy updates.” The White House announced on Tuesday afternoon an Executive order It provides some tweaks to 25% tariffs on imported vehicles and auto parts. For example, automakers who pay tariffs on imported cars will not be forced to pay other duties implemented, such as steel and aluminum. This year, automakers who manufacture vehicles in the US will get a 15% rebate to offset the cost of tariffs. That rebate will be 10% in the second year.
The tariff update “sounds great on paper,” but a car made by the US with full US-sourced parts is “a fictional story that is not possible today,” Wedbush Securities analysts Dan Ives and Sam Brandeis wrote on a note of Wednesday morning. Analysts estimated that it could take four to five years to promote US -based factories or production hubs. The average auto sticker price will “climb about $ 5,000 to $ 10,000 when this tariff situation is all fixed” and inventory cycles through the current stock, guessing wedbush.
GM (No. 19 in Fortune 500) released Q1 results on Tuesday. For the quarter, the adjusted diluted EPS is $ 2.78, up to 6.1% years over the year and leads the $ 2.74 lseg consensus. The income is $ 44.02 billion, compared to the estimates of $ 43.05 billion. And the company has removed its 2025 guide.
It is unclear if no guide to 2025 will be released or if GM will lower the guidance it provided on January 28, according to strategic MorningStar strategic David Whiston. “We look at the removal of guidance as concentrated from the massive uncertainty of the tariff rather than problems with the particular company,” Whiston wrote on a note on Tuesday. “We do not think that any executive in our US autos coverage has sufficient clarity to make capital allocation decisions for mid -long term, remembering a 2025 income forecasting.”
The adjustment of Tuesday to the auto tariff policy should bring clarity as it limits tariff exposure especially to 25% foreign autos tariff, he said. “But there is always the risk of more changes in tariff policy,” Whiston said.
GM does not unite in removing its guidance. For example, earlier this month, Carmax, the largest retailer of used cars in the US, turned away from offering a long-term timeline of financial goals due to tariff uncertainty. “Why put a target there that is really speculating, don't know exactly where this environment is going?” Carmax CEO Bill Nash said on April 10 on a revenue call.
This income period, many companies mentioned the tradition of predicting quarterly income. However, there are exceptions, such as Levi's, whose CFO Harmit Singh has recently told me that the company will maintain a 2025 top- and under-line guide.
I'm sure analysts will have many questions for GM during its income call on Thursday.
Sheryl Estrada
Sheryl.estrada@fortune.com
This story was originally featured on Fortune.com
