General Motors is cutting its earnings forecast for the year, in part because of higher commodity costs
New York (AFP) – General Motors cut its full-year profit forecast Wednesday, citing higher commodity costs and a foreign exchange hit in Argentina and Brazil.
The biggest US automaker reported second-quarter profit of $2.4 billion, which was up 44 percent from the year-ago level following car sales increases in North America and China.
Revenues were $36.8 billion, down 0.6 percent from a year ago.
GM’s North America sales continued to benefit from a strong performance in sport utility vehicles, pickups and other large vehicles, with key vehicles scoring double-digit increases in sales in the US.
GM also reported another round of strong sales in China, where its unit delivered more than 858,000 vehicles in the second quarter.
But GM trimmed its earnings forecast from its prior range of $5.52 to $5.82 per diluted share to approximately $5.14 per share.
The company cited a “significant” increase in commodity costs, as well as the sinking valuation of the Argentine peso and Brazilian real that have marred its sales outlook in those markets.
Several other industrial companies including Whirlpool and Alcoa have cited higher costs for metals and oil-related commodities as a drag in the second quarter. One factor has been US tariffs on imported steel and aluminum.
Shares of GM sank 4.9 percent to $37.54 in pre-market trading.
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