General Motors (NYSE: GM) reported strong financial results for the first quarter of 2025, beating Wall Street expectations despite a 9.8% drop in adjusted earnings before interest and taxes (EBIT).
The company announced adjusted earnings per share (EPS) of $2.78, which was higher than the predicted $2.74, and revenue of $44.02 billion, exceeding the expected $43.05 billion.
This shows a 2.3% increase in revenue compared to the same period last year, though net income fell 6.6% to $2.78 billion compared to the previous year. Adjusted EBIT decreased by 9.8% to $3.5 billion, mainly due to rising costs.
Even with these strong quarterly results, GM warned investors about the outlook for the rest of the year. The company is reevaluating its 2025 guidance because of uncertainty regarding new auto tariffs, including a 25% tariff on imported vehicles and additional duties on steel, aluminum, and parts.
CFO Paul Jacobson stated that the original 2025 financial guidance, which predicted net income between $11.2 billion and $12.5 billion and adjusted automotive free cash flow of $11 billion to $13 billion, did not consider the impact of tariffs and “can’t be relied upon.”
GM has stopped additional stock buybacks due to this uncertainty but expects to finish its accelerated repurchase program in the second quarter.
The tariffs have caused significant cost pressures, leading GM to change its operations. This includes increasing truck production in Indiana and pausing electric delivery van production in Canada.
While some tariff reimbursements might cover 30% to 50% of North American tariffs, the total impact is still unclear, causing GM to delay updating its full-year guidance until the regulatory situation becomes more certain.
In summary, GM’s first-quarter results show good performance with revenue and EPS exceeding expectations, but risks related to tariffs are causing caution in the company’s outlook for the year. This highlights the challenges U.S. automakers face with changing trade policies.