Or, more precisely, it was guidance disappointment day as big U.S. industrials such as General Motors (GM), Pentair (PNR), and Boeing (BA) reported earnings and then issued guidance for the rest of 2018.
Earnings for the quarter were, generally, fine.
General Motors, for example, beat earnings expectations for the second quarter with earnings of $1.81 a share on revenue close to the Wall Street consensus at $36.8 billion. In China the company recorded record equity income of $592 on record sales. In the United States General motors saw deliveries in the first half grow by 4.6%, beating the 2.2% industry-wide increase.
But in its guidance for the rest of the year the company told investors to expect a hit to profits from higher prices for steel and aluminum as a result of higher U.S. tariffs. On that guidance, General Motors shares dropped 4.6% on the day.
Pentair, another metal bender through its pumping business, reported earnings of 88 cents a share vs the consensus estimate of 83 cents. Revenue was up 7.3% year over year to $1.27 billion, above the Wall Street consensus of $1.23 billion. But Pentair said that higher costs in the next quarter would take a bite out of earnings  before the company can move to recoup lost margin toward the end of the year. Pentair shares were down 5.14% on the day.
Companies like General Motors and Pentair are feeling the impact of the earliest round of the Trump administrations higher tariffs–the 25% tariff on imported steel and the 10% tariff on aluminum. It’s reasonable to expect other companies to feel similar effects from higher costs and cuts in export markets as more tariffs go into effect.
