What General Motors (GM) Said on Its Q3 Earnings Call

Key Points

• GM reported a strong third quarter, with revenue rising 3% to $50 billion, adjusted EBIT up 22% to $4.1 billion, and adjusted EPS increasing more than 30% to $3.70. North American EBIT climbed 43% to $3.6 billion, supported by stronger truck mix, lower EV losses, and reduced warranty costs.
• The company raised its 2026 adjusted automotive free-cash-flow outlook to $11.5 billion–$12.5 billion and narrowed its adjusted EBIT and EPS guidance ranges. GM also authorized a new $20 billion multiyear share-repurchase program after completing $6.3 billion of buybacks year to date.
• GM expects software and services, redesigned full-size pickups, and declining EV losses to support future growth, but warned that elevated steel, copper, logistics, and DRAM costs could create significant headwinds in 2027. EV-related cash charges totaled $7.4 billion since late 2025, with additional payments expected.

General Motors NYSE: GM reported record third-quarter revenue and higher adjusted earnings, while raising its outlook for adjusted automotive free cash flow and authorizing a new $20 billion multiyear share-repurchase program.

Chair and CEO Mary Barra said the company generated $12.3 billion in adjusted EBIT, $12.2 billion in adjusted automotive free cash flow and $10.97 in adjusted diluted earnings per share through the first nine months of 2026. Adjusted diluted EPS was up more than 35% from a year earlier, she said.

For the third quarter, GM reported revenue of $50 billion, up 3% year over year, according to Executive Vice President and CFO Paul Jacobson. Adjusted EBIT rose 22% to $4.1 billion, while adjusted diluted EPS increased more than 30% to $3.70. Adjusted automotive free cash flow totaled $5.9 billion, an increase of $1.7 billion from the prior-year period.

North America performance and revised outlook

GM's North American business posted adjusted EBIT of $3.6 billion, up 43% year over year, with an 8.7% margin. Jacobson said the margin improvement reflected a richer mix of full-size pickups, reduced EV losses following capacity adjustments and lower warranty expense. Those benefits were partly offset by commodity inflation, logistics costs, higher DRAM costs and costs associated with moving production to the United States.

The company said it has now worked through much of the tariff pressure it faced and is back within its targeted North American margin range of 8% to 10%.

GM narrowed its full-year 2026 adjusted EBIT outlook to a range of $14.5 billion to $15.5 billion, compared with its prior range of $14 billion to $16 billion. It raised its adjusted automotive free cash flow forecast to $11.5 billion to $12.5 billion from $9.5 billion to $11.5 billion. Adjusted diluted EPS guidance was narrowed to $12.75 to $13.75, from $12 to $14.

Capital expenditures are expected to land in the lower half of GM's prior $10 billion to $12 billion range. Jacobson said the improved cash-flow outlook reflected operational performance, lower projected capital spending and tariff timing.

GM expects U.S. industry sales to remain in the mid-16 million-unit range for the full year. The company said fourth-quarter internal-combustion-engine volumes will be lower than usual because of the launch of its next-generation full-size pickups, with an expected year-over-year headwind of roughly 35,000 pickups.

Pickup launch and digital revenue plans

GM's U.S. sales totaled more than 670,000 vehicles in the quarter. ICE sales of 645,000 vehicles increased slightly despite discontinued models, and light-duty full-size pickup sales rose 9% year over year. GM said it remains on pace to lead the U.S. full-size pickup market for a seventh consecutive year.

The company has begun production of its new Chevrolet Silverado and GMC Sierra light-duty pickups at Silao Assembly. Vehicles are expected to arrive in dealerships late in the fourth quarter. Fort Wayne is scheduled to begin production in January after four planned down weeks, while Orion is expected to begin production in the second quarter.

Barra said GM expects to build approximately the same number of trucks in 2027 as in 2026 because of launch-related downtime across three assembly plants and three engine plants. The company expects incremental capacity in 2028, including capacity from Orion, to support market-share growth.

GM also expects the redesigned trucks to support adoption of Super Cruise and digital services. Barra said Super Cruise will be standard on high-end Silverado and Sierra trims and available on most other versions. The company expects full-size truck Super Cruise penetration to grow four to five times in 2027.

OnStar Digital and Super Cruise generated more than $800 million of recognized revenue during the quarter, up 15% year over year. GM expects more than $3 billion in realized software and services revenue during 2026 and nearly $7.5 billion in deferred revenue by year-end. The company said deferred revenue was up 40% year over year, supported by one million new OnStar subscriptions and a Super Cruise-equipped vehicle population of about one million.

Inflation, EV costs and 2027 considerations

Management said its outlook for 2027 depends in part on commodity, logistics and memory costs moderating. Copper prices have reached record levels, while hot-rolled coil steel prices are at four-year highs, Jacobson said. Spot prices for both steel and copper were up 10% to 15% since July and about 50% above last year's average.

GM said the recent inflation is adding roughly $400 million in incremental costs during 2026, with most of the impact expected in the fourth quarter. The company now expects commodity inflation, logistics and DRAM costs to create a full-year headwind of about $2 billion. If recent commodity inflation were annualized, it could represent an additional $1 billion to $1.5 billion adjusted EBIT headwind in 2027, Jacobson said.

Barra said GM expects support from continued warranty improvements, better EV profitability, software and services growth, truck mix and pricing opportunities, and fixed-cost management. She said the company is increasing its use of artificial intelligence across functions to improve operating efficiency, though management did not quantify expected savings.

GM expects EV losses to decline by $1 billion to $1.5 billion for the full year as it aligns capacity and production with demand. It incurred an additional $200 million in EV-related cash charges during the third quarter, bringing total charges since the end of the first half of 2025 to $7.4 billion. Of that amount, $4.6 billion has been paid, with roughly $1 billion more expected in the fourth quarter and the remaining payments expected in 2027.

Share repurchases and international operations

GM repurchased $2.5 billion of stock in the third quarter and another $1 billion in October, bringing year-to-date buybacks to $6.3 billion and completing its prior authorization. The repurchases reduced diluted shares by about 27 million during the quarter to roughly 866 million, or 9% below the third-quarter 2025 level. Barra said fully diluted shares have declined 37% since GM began using surplus cash for repurchases in 2023.

The new $20 billion authorization represents more than 25% of the company's current market capitalization, Jacobson said. Management did not provide a timetable for repurchases, saying it would remain opportunistic while following its capital-allocation framework.

GM International, excluding China equity income, was breakeven in the quarter, down $200 million year over year. The result included a $100 million negative mark-to-market adjustment related to Momenta, as well as higher manufacturing and logistics costs. China equity income was $32 million, marking GM's eighth consecutive profitable quarter in the market.

GM Financial reported adjusted earnings before tax of $700 million and paid a $250 million dividend to GM. The financing unit remains on track for full-year adjusted EBT of $2.5 billion to $3 billion, management said.

About General Motors (NYSE:GM)

General Motors Company NYSE: GM is a global automotive company headquartered in Detroit, Michigan. Founded in 1908, GM designs, manufactures and sells vehicles and related services through brands including Chevrolet, Buick, GMC and Cadillac.

GM's product lineup includes passenger cars, pickup trucks, sport utility vehicles, commercial vehicles and electric vehicles. The company is also developing connected-vehicle technologies, driver-assistance systems and charging and energy-management solutions.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.