By Kalea Hall
DETROIT, July 21 (Reuters) – General Motors lifted its earnings outlook for the year on Tuesday after posting a 30% increase in second-quarter core profit on the back of profitable SUV and truck sales.
The Detroit automaker said it easily surpassed analysts’ profit estimates despite a choppy economic backdrop as consumers grappled with higher gas prices, persistent inflation and slowing job growth during the quarter.
Strong profit in its home market of North America, which is also its biggest, was driven by solid pricing.
GM shares fell about 1% in premarket trading.
The company’s quarterly earnings before interest and tax were $3.9 billion, against roughly $3 billion a year earlier. On an adjusted basis, it earned a profit per share of $3.57, topping analyst expectations of $3.20, according to LSEG data.
GM raised its 2026 profit outlook by $500 million to a range of $14 billion to $16 billion. In the first quarter, GM increased its outlook by $500 million, the amount it expects to recover from refunds tied to a U.S. Supreme Court ruling that struck down some of the Trump administration’s tariffs.
The automaker benefited from stronger sales of gas-powered cars and a sharp drop in sales of electric vehicles, which have been money losers historically. The Trump administration last year eased regulations on vehicle fuel efficiency and emissions, allowing companies to sell more combustion-engine cars.
Despite the stronger than expected quarter, the largest U.S. carmaker by sales said its results will continue to be weighed down by tariff pressures and rising supply costs.
GM held steady an earlier forecast of a $2.5 billion to $3.5 billion hit to its bottom line from tariffs. It said inflation in raw materials, computer chips and logistics should cut earnings by $1.5 billion to $2 billion this year.
The relocation of factory work to the U.S. from overseas, plus higher software expenses, led to between $1 billion and $1.5 billion of additional costs, it said.
In a letter to shareholders, CEO Mary Barra said that the company plans to bring more factory work to the U.S. to reduce its tariff exposure.
Quarterly net income dropped 31% from a year earlier to $1.3 billion, mostly because of about $2.3 billion in costs related to restructuring of electric vehicle factory operations. Revenue of $48 billion was up 2%.
In North America, the profit margin improved to 8.6% from 6.1% a year earlier, despite a 4% decline in quarterly sales.
In China, where GM is restructuring, it reported equity income of $83 million, up from $71 million a year earlier. Its international business, excluding China, posted core profit down 7% at $190 million.
(Reporting by Kalea HallEditing by Alexander Smith and David Goodman)
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