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As the global trade war rages on, US companies navigating earnings season are being cautious to avoid forward-looking statements.
We’ve already seen Delta Airlines pull its 2025 guidance, with executives saying tariff policy “uncertainty” makes future projections challenging. CarMax also withdrew its long-term growth timeline.
“Why put a target out there that’s really speculative, not knowing exactly where this environment is going to go?” CarMax CEO and president Bill Nash said on the company’s earnings call earlier this month.
United Airlines executives took a different approach, opting on their earnings call to provide investors with two vastly different profit forecasts. On the high end — should conditions remain “stable” — adjusted earnings per share could be as high as $13.50. On the low end — if the US economy enters a recession — EPS could dip to $7.
President Trump’s “Liberation Day” tariff policies may not be directly reflected in Q1 earnings. But we know that companies and consumers have changed their behavior in the past few months in anticipation of a global trade shift.
US retail sales were up 1.4% in March, with big-ticket items like cars leading the way — a sign consumers were looking to lock in prices ahead of tariffs going into effect. The US ISM manufacturing inventories index also rose last month, signaling companies may have been stockpiling goods and supplies before import prices go up.
The first of the so-called Magnificent 7 (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla) are scheduled to report earnings this week. Tesla kicks things off tomorrow, and Alphabet’s call is slated for Thursday.
Tesla will be particularly interesting to watch — because of CEO Elon Musk’s ties to the White House and because tariffs are expected to impact the electric vehicle company.
Despite Tesla ramping up its domestic supply chain in recent years and assembling its cars in the US, the company relies heavily on foreign imports (especially from China). On Tesla’s Q4 2024 earnings call, CFO Vaibhav Taneja said tariffs are expected to have an impact on the company’s “business and profitability.”
For Alphabet, investors will be waiting to hear how executives are thinking about global macroeconomic conditions. Business spending is expected to decrease with tariffs, leading to a smaller global ad market. Retail ads represent almost a quarter of Google’s ad revenue, analysts from Oppenheimer estimate.
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