The share price of General Motors’ stocks fell by almost 6% after the official market opening on Wednesday morning of July 25th. By 9:50 am EDT, the price had slumped 6.41% to sell at $36.94, down from the opening price of $37.45. The threat of trade wars between the US and Europe has negatively affected the company’s outlook in terms of revenues in the upcoming year. The company now projects earnings per share profits of only $5.14, versus the previously predicted profit per share price of $6.
Despite the damp outlook, General Motors’ quarterly earnings beat analysts’ expectations of $1.78 per share to reach $1.81 per share. At the same time however, revenues fell just short of expectations to total $36.76 billion. General Motors now faces rising production costs as a direct result of the tariffs imposed on steel and aluminum from Canada, the European Union and Mexico. The 25% tariff became effective in June of this year and the effects have been negative for General Motors. The expectation is that the tariffs will weigh heavily on the company’s bottom line in the upcoming years. In order for profits to grow, the company must establish ways of increasing revenues rapidly. It is worthy to note, however, that stock prices for both Ford and Tesla also fell by about 3%.
During the last 52 weeks, GM stocks have traded for between $34.50 and $46.76 per share with the expectation that they will sell at approximately $49.39 per share by the end of the next 12 months. Market capitalization for this stock now stands at $52.114 billion. Forward dividend and yield are currently at 1.52 and 3.82% respectively. Trading volume is just over 9.6 million shares, slightly below the average trading volume of 10.97 million shares. Analysts recommend a “buy” for GM shares at this time.