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General Motors has become one of the largest companies to reduce its earnings guidance to the year due to the rising costs of steel and aluminum, in a warning that could exacerbate fears that the US trade war Donald Trump will hurt US economic growth.
GM expects the adjusted earnings for 2018 to be between $ 5.80 and $ 6.20 per share, compared to the previous forecast between $ 6.30 and $ 6.60. 19659002] Chuck Stevens, the company 's outgoing chief financial officer, said margins for the year would be in the order of 9 to 10%, below the previous forecast of 10%. GM shares fell nearly 6% in operations before the market opened.
"Significant increases in raw material costs and the adverse impact of the Argentine peso and the Brazilian real exchange rate have affected the company's expectations," GM said in a statement accompanying the report second quarter earnings.
"Because society predicts that the headwinds will continue throughout the second half of 2018, we looked at the prognosis for the entire year."
GM was on the right track for a Another record of profits until the tariffs on steel and aluminum that Trump introduced are high metal costs. The company has suffered the blow despite the fact that most of the steel and aluminum that it uses is in the country.
The threat of new tariffs on cars imported into the United States could affect the results for the country as a whole. The company's year, according to industry analysts, although Mr Stevens predicted that annual sales in the United States could be stronger than expected despite tariffs
"We do not let's not expect tariffs to have an impact on US vehicle sales in 2018, "he said. GM "participated at the appropriate levels with the government" in the tariff talks said, adding: "There are a lot of moving parts, right now it is very complicated." It's too early to make any major policy changes because of the rates, he adds.
GM published adjusted earnings per share of $ 1.81 for the three months to the end of June, exceeding market expectations by $ 1.78. below that he realized in the same period last year $ 1.89. Earnings before interest and taxes, adjusted for the period, declined 13% to $ 3.2 billion.
"We faced significant external challenges, but we achieved strong results this quarter," said the Executive Director. Mary Barra.
US sales, better than expected in the second quarter, helped boost GM's revenue, as consumers continue to buy pickup trucks and SUVs that perform well. margin despite rising oil prices and interest rates.
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