Good morning. At the start of Q2 earnings season, investors looked for tariff-related impacts on profits. Major U.S. financial firms reported only limited effects—especially compared to the auto industry.
General Motors (No. 18 on the Fortune 500) reported its Q2 earnings results on Tuesday. The company’s net income fell 35% from the same period last year, as higher costs and uncertainty surrounding the Trump administration’s automotive tariffs resulted in a $1.1 billion hit to its bottom line.
“We’re still tracking to offset at least 30% of the $4 billion to $5 billion full-year 2025 tariff impact through strategic actions such as manufacturing adjustments, targeted cost initiatives, and consistent pricing,” GM CFO Paul Jacobson said during the earnings call.
Adjusted automotive free cash flow was $2.8 billion, down $2.5 billion year over year, primarily due to tariff payments as well as headwinds from working capital and lower dealer inventory, Jacobson said.
CEO Mary Barra added that GM’s tariff burden would be lower if tariffs with Mexico, Canada, and Korea were reduced.
President Donald Trump imposed a 25% tariff on all imported cars and auto parts, effective in early April. Vehicles assembled in the U.S. are eligible for partial tariff offsets, allowing automakers to receive reimbursement on a portion of tariffs paid for foreign-made parts used in U.S.-built vehicles.
Despite year-over-year declines in revenue and ongoing tariff pressures, GM outperformed market expectations across major metrics:
- Total revenue reached $47.12 billion, down about 2% year over year, but exceeding Wall Street’s estimate of $46.25 billion.
- Adjusted EBIT was $3.04 billion (down $1.4 billion year-over-year), topping analyst expectations of $2.84 billion.
- Earnings per share were $2.53, also ahead of the consensus estimate of $2.34.
Notably, U.S. sales rose 7%, and the company continued to command strong pricing on pickup trucks and SUVs.
A focus on agility
GM remains confident that total tariff expenses will decline as new bilateral trade deals emerge and as sourcing and production adjustments are made, Jacobson noted.
“Our agility and responsiveness to evolving consumer preferences and regulatory demands remain key strengths that set us apart,” he said.
Agility is a particularly relevant concept, as it is now widely regarded as essential for CFOs amid economic volatility, regulatory pressures, shifting supply chains, and rapidly changing market conditions. “As we navigate an era of unreliability, fast actions may differentiate winners from losers,” according to Paul Melville, national managing principal of CFO advisory for Grant Thornton Advisors.
The firm’s latest CFO survey finds that agile CFOs can adapt strategies quickly, enabling companies to pivot in response to disruptions. The most popular tactics to reduce tariff impacts are adjusting supply chains, conducting frequent scenario planning, implementing cost-saving technologies, and raising prices.
However, Jacobson told CNBC that he’s not expecting any specific price increases related to tariffs.
Wedbush analysts see an upside for GM. “While the tariff headlines continue to put further pressure on the bottom line for the foreseeable future, we believe Barra & Co. continues to impressively navigate the complex backdrop,” the analysts wrote in a note to investors Tuesday, adding that this is occurring amid continued high demand for GM’s entire fleet of EVs and internal combustion engine vehicles.
The analysts also noted that, in order to mitigate the long-term impact of tariffs, GM is investing $4 billion to build new U.S. assembly plants—with production set to begin in 2027. Wedbush maintains its Outperform rating.
As investors look to the future, all eyes will be on GM’s ability to stay one step ahead in a rapidly changing market environment.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Jerry Lombardo was appointed CFO of CrossCountry Consulting, a finance, operations, and technology advisory services firm. He succeeds Steve Boyce, who served as CFO for nearly three years before recently departing. Lombardo brings more than 30 years of experience as a finance leader. He previously served as global CFO at Burson. Lombardo has also led financial strategy initiatives at JPMorgan Chase, Ally Financial, and Ditech.
Will McDade was appointed CFO of Alphia, one of the largest pet food manufacturers in North America. McDade joins the Alphia team with over two decades of experience. Before joining Alphia, he served for 10 years as CFO and secretary of Interstate Batteries, where he led accounting, finance, IT, strategy, procurement, quality, customer service, and M&A. He additionally served as chief operating officer in 2024. Prior to Interstate, McDade spent 15 years with Keurig Dr Pepper, where he held multiple senior leadership positions in both supply chain and finance, and led a five-year transformation program.
Big Deal
"The Rise of RevOps to the C-Suite," a study by Salesloft in partnership with Wakefield Research, surveyed 400 U.S. revenue operations (RevOps) and executive leaders across manufacturing, telecommunications, financial services, and technology. The study found that 73% of companies now have a C-suite role dedicated to RevOps. Additionally, 98% reported a broader scope for RevOps in the past year, and 94% noted increased executive attention.
According to the report, this shift is driven by ongoing economic uncertainty and advancements in AI that enable seamless cross-functional data integration. Also, 87% of respondents plan to increase investment in RevOps. However, teams indicate they need more than just a larger budget—citing clearer mandates (64%), modern tools (62%), and consistent access to executives (62%) as top priorities.
Going deeper
"Alexandr Wang is now leading Meta’s AI dream team. Will Mark Zuckerberg’s big bet pay off?" is a new Fortune feature by Sharon Goldman.
From the article: "In June, Mark Zuckerberg handed the now 28-year-old Wang the keys to Meta’s entire AI operations as part of a $14.3 billion investment in Scale AI. As Meta’s first-ever chief AI officer, Wang now leads a newly formed superintelligence team packed with AI industry superstars paid like high-priced athletes, and oversees Meta’s other AI product and research teams—all under the umbrella of a new organization called Meta Superintelligence Labs."
Overheard
"A thing that terrifies me is apparently there are still some financial institutions that will accept the voiceprint as authentication."
—OpenAI CEO Sam Altman said during a Federal Reserve conference on Tuesday in Washington, D.C., that there's a threat of a “significant impending fraud crisis” due to the ability of AI tools to impersonate a person’s voice to bypass security checks.
