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General Motors Co.’s second-quarter net income rose amid strong results from its in-house finance arm and China, but the auto maker lowered its 2018 profit outlook based partly on unexpectedly high raw-materials costs in the wake of U.S. tariffs on steel and aluminum.
GM GM, -6.68% on Wednesday said net income attributable to common shareholders totaled $2.4 billion for the April-to-June period, up 44% from a year earlier. GM said commodity costs in the quarter were about $300 million higher than a year earlier.
The nation’s largest car company by sales said it expects raw-materials costs to rise well beyond what it expected when it set its profit guidance at the beginning of the year. A combination of higher commodity prices—primarily steel and aluminum—and unfavorable foreign-exchange rates in South America will result in a hit of about $1 billion more than what the company originally forecast.
GM reduced its 2018 earnings-per-share forecast to $6, from a range of $6.30-$6.60. Analysts had forecast EPS of $6.41.
Steel prices have risen sharply since spring, when the Trump administration signaled its plan to put a 25% tariff on steel and 10% on aluminum. The metals account for more than half the content in a typical automobile. The tariffs took effect June 1.
An expanded version of this report appears at WSJ.com.
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