General Motors (NYSE: GM) tumbled Wednesday after the largest U.S. automaker cut its profit outlook for the year, citing higher commodity prices and unfavorable foreign exchange rates in South America.
The automaker now expects to earn about $6.00 per share in 2018, down from its previous forecast of $6.30 to $6.60 a share.
The car and truck giant said in the earnings release, "Recent and significant increases in commodity costs and unfavorable foreign exchange impact of the Argentine peso and Brazilian real have negatively affected business expectations.” GM added that it "anticipates these headwinds will continue" through 2018.
General Motors' profits beat Wall Street expectations. It posted earnings per share of $1.81 on an adjusted basis, compared with the $1.78 expected by analysts. Revenue in the three months ended in June came in at $36.76 billion, slightly higher than estimates, but down 0.6% from a year earlier.
Net income rose more than 40% from the second-quarter a year ago to $2.39 billion, but for continuing operations, profits fell slightly from a year earlier.
Rival Ford (NYSE: F) reports earnings after the market closes on Wednesday. Both companies' share prices have lagged the broader market, with GM down 3.7% this year and Ford's down more than 15%, compared with the S&P 500's gain of more than 5%.
Shares in GM plummeted $2.41, or 6.2%, early Wednesday to $37.04, within a 52-week trading range of $34.50 to $46.76.
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