general motors 2025 Q2 Earnings Misses Targets with Net Income Down 35%

General Motors reported its fiscal 2025 Q2 earnings on July 21st, 2025. The results were mixed, with revenue slightly declining and earnings falling short of expectations. The automaker's net income dropped 35% to $1.89 billion, primarily due to a $1.1 billion tariff impact. Despite these challenges, GM maintained its full-year profit forecast, projecting adjusted earnings before interest and taxes (EBIT) between $10 billion and $12.5 billion, in line with previous guidance adjustments.

Revenue

General Motors saw its total revenue decrease by 1.8% to $47.12 billion in Q2 2025, compared to $47.97 billion in Q2 2024. The automotive segment generated $42.87 billion, while GM Financial contributed $4.25 billion, culminating in total net sales and revenue of $47.12 billion.

Earnings/Net Income

General Motors experienced a decline in earnings per share (EPS), falling 24.5% to $1.94 from $2.57 the previous year. The company's net income decreased significantly by 34.2% to $1.89 billion, indicating a challenging financial period.

Price Action

The stock price of General Motors edged down 0.26% during the latest trading day, dipped 0.23% throughout the most recent trading week, yet jumped 10.21% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing GM shares following a quarter with increased revenue and holding for 30 days yielded moderate returns but underperformed the market. The strategy's compound annual growth rate was 7.89%, lagging behind the benchmark by 28.69%. Despite having a maximum drawdown of 0.00% and a Sharpe ratio of 0.23, which signals low risk, the returns were modest, making this approach more appealing to investors seeking stability.

CEO Commentary

Mary Barra, CEO of General Motors, emphasized the company's commitment to advancing transportation through technology, focusing on producing safer and lower-emission vehicles. She attributed the revenue decline to market challenges but expressed confidence in GM's strategic initiatives, particularly in innovation and electric vehicles, as key growth drivers. Barra remains optimistic about overcoming current challenges and positioning GM for long-term success.

Guidance

General Motors expects net income attributable to stockholders for the year ending December 31, 2025, to range between $7.7 billion and $9.5 billion, with EBIT-adjusted projected between $10.0 billion and $12.5 billion. The company anticipates diluted earnings per share to be between $8.22 and $9.97, with minimal adjustments, leading to an adjusted EPS of $8.25 to $10.00.

Additional News

Recently, GM announced a $4 billion investment to shift some vehicle production from Mexico to U.S. plants, aiming to mitigate tariff impacts. This strategic move is part of the company's broader efforts to reduce tariff exposure, with plans to increase production capacity in the U.S. GM's focus on expanding its manufacturing footprint aligns with its goal of scaling more than 2 million vehicles annually in the U.S. Barra remains committed to adapting to new trade policies and enhancing the company's competitive position amidst evolving market conditions.