General Motors reported third-quarter results that exceeded Wall Street expectations, prompting the company to adjust its full-year earnings outlook and raise free cash flow projections. The Detroit automaker also unveiled a new multiyear stock repurchase program valued at $20 billion, following completion of a $6 billion buyback initiated in January, though the company did not specify a timeline for finishing the new program.
Despite the stronger-than-expected quarterly performance, GM’s stock declined nearly 7% during trading as investors focused on the revised full-year guidance, which fell short of analyst expectations. Wall Street had anticipated adjusted earnings per share with a midpoint of $13.41 for the year, compared with GM’s new midpoint of $13.25 per share. Several analysts noted that while third-quarter results were solid, concerns persisted regarding cost pressures and vehicle pricing constraints that could limit earnings expansion in subsequent periods.
GM’s updated guidance positioned adjusted earnings before interest and taxes between $14.5 billion and $15.5 billion, translating to $12.75 to $13.75 in adjusted earnings per share, with adjusted automotive free cash flow projected between $11.5 billion and $12.5 billion. This represented a narrowing from the company’s July guidance, which had ranged from $14 billion to $16 billion in adjusted EBIT and $12 to $14 in adjusted earnings per share.
The company cited significant inflationary pressures, including approximately $2 billion in commodity inflation costs at the high end of previous estimates, driven by elevated logistics expenses and dynamic random-access memory chip costs affecting multiple industries. GM noted that gross tariff costs were expected to land at the low end of its $2.5 billion to $3.5 billion range, while warranty expenses were anticipated at the high end between $1 billion and $1.5 billion. CFO Paul Jacobson indicated that vehicle pricing remained relatively flat despite mounting inflationary pressures, with the company planning to evaluate consumer conditions before potentially raising prices more aggressively.
The automaker reported net income attributable to stockholders of $3.3 billion during the quarter, representing an increase of roughly $2 billion compared to the prior year. North American operations led the company’s results, contributing $3.6 billion of the $4.1 billion in adjusted EBIT. Additionally, GM stated that expenses associated with its previously announced pullback in all-electric vehicle production were substantially concluded, with cumulative charges of $11.2 billion recorded since the second half of the prior year.
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