GM shares jump as strong quarter backs shareholder returns
General Motors delivered another solid quarter, beating earnings expectations and reinforcing its shareholder-friendly stance with a dividend increase and a new $6 billion stock buyback authorization.
In the fourth quarter, GM reported adjusted earnings per share of $2.51, above consensus estimates, even as revenue slipped modestly year over year, according to Yahoo Finance.
Adjusted EBIT also came in slightly ahead of expectations, underscoring disciplined cost control in a challenging environment. Investors reacted positively, sending GM shares more than 4% higher in premarket trading. The board raised the quarterly dividend to $0.18 per share, reflecting confidence in cash generation. Management said strong demand for core vehicles and improving margins in North America supported the results. CEO Mary Barra framed the quarter as further proof of GM’s operational resilience.
Outlook for 2026 amid tariffs and cost pressures
Looking ahead, GM guided for adjusted EBIT of $13 billion to $15 billion in 2026, alongside adjusted automotive free cash flow of $9 billion to $11 billion. The company expects North American margins to return to the 8%–10% range, helped by pricing discipline and onshoring efforts. At the same time, GM acknowledged meaningful headwinds, including $3 billion to $4 billion in additional tariff costs next year. Commodity and foreign exchange pressures could add another $1 billion to $1.5 billion, while onshoring and other structural costs remain elevated.
Management noted that the U.S. regulatory environment is becoming more aligned with consumer demand, supporting domestic production. Barra emphasized that GM’s scale and manufacturing footprint position it well despite policy uncertainty. Overall, guidance suggests steady profitability but little room for execution missteps.
EV challenges alongside strength in core vehicles
Electric vehicles remain the most visible drag on GM’s outlook, with the company taking a combined $6.6 billion in EV-related write-downs over recent quarters. Fourth-quarter EV sales fell sharply, reflecting softer demand and the expiration of the federal EV tax credit. GM expects EV unit losses to improve by up to $1.5 billion in 2026, partly due to regulatory credit savings.
Still, management warned of additional, though smaller, EV-related charges next year. In contrast, GM’s core business remains strong, with full-size pickups posting their sixth straight year of growth and SUVs like the Tahoe and Yukon leading their segments. Overall U.S. vehicle sales rose in 2025, cementing GM’s position as the top-selling automaker. The contrast highlights a company balancing profitable legacy vehicles against a slower, more uncertain EV transition.
Recently we wrote that Tesla stock is trading at $437.76, down 2.5% in the past 24 hours, following a strategic shift in its driver-assistance offerings and ahead of a high-stakes earnings release.
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