GM shares sink as full-year profit forecast misses Wall Street estimates
Revenue totaled US$50 billion, up 2.9% from a year earlier
GENERAL Motors’ third-quarter core profit rose sharply on the back of strong pickup truck sales, but its shares fell on Tuesday (Oct 20) after the automaker’s earnings-per-share forecast for the full year fell short of analyst expectations.
The company said quarterly earnings before interest and tax, not including one-time items (adjusted EBIT), rose 22 per cent from a year earlier, to US$4.1 billion. That amounted to US$3.70 per share, topping analyst expectations of US$3.63, according to LSEG data.
GM said it expected to end 2026 with adjusted EBIT in the range of US$14.5 billion to US$15.5 billion, narrowed from previous guidance of US$14 billion to US$16 billion.
It tightened its annual adjusted earnings-per-share forecast to between US$12.75 and US$13.75, the midpoint of which is below analysts’ estimates of US$13.41, according to data compiled by LSEG.
GM shares fell about 4 per cent in premarket trading.
Stock buyback
GM said it remained confident despite inflationary pressures from higher logistics and energy costs, tariffs and other expenses. Commodity inflation, including higher expenses for logistics and computer chips, would total about US$2 billion this year, the high end of its previous forecast, it said.
Its board approved a multi-year, US$20 billion stock buyback programme. GM has bought back about US$29.5 billion of its own shares since 2023, driving down its overall share count to help its per-share profit results.
In the third quarter, it sold a higher mix of large pickup trucks and fewer electric vehicles, which helped the bottom line. The company has been pulling back on sales of EVs, which historically have lost money, following the Trump administration’s withdrawal of support for them.
Revenue totaled US$50 billion, up 2.9 per cent from a year earlier. In North America, the profit margin improved to 8.7 per cent, from 6.2 per cent a year earlier, despite a slight decline in quarterly sales.
GM said “the path forward is more challenging,” but reiterated that it expects next year’s results to be better, assuming continued strong consumer demand and a moderating of cost pressures on commodities and logistics. REUTERS
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