GM Earnings Beat Q3; Board Approves $20B Buyback
GM earnings beat Q3 revenue and adjusted EPS, raised automotive free-cash-flow outlook and approved a $20.0 billion buyback, prompting cautious investors.
KEY TAKEAWAYS
- GM reported Q3 revenue of $50.0 billion and adjusted diluted EPS of $3.70.
- GM raised automotive adjusted free-cash-flow outlook to $11.5 billion-$12.5 billion while narrowing adjusted EBIT and EPS guidance.
- Board authorized a multiyear $20.0 billion repurchase after completing a $6.0 billion program and declared a $0.18 dividend.
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General Motors reported third-quarter 2026 revenue of $50.0 billion and adjusted diluted earnings per share (EPS) of $3.70 on Oct. 20, 2026. The company raised its automotive free-cash-flow outlook while narrowing full-year EBIT and EPS guidance.
Quarter Results and Outlook
For the quarter ended Sept. 30, 2026, GM posted adjusted earnings before interest and taxes (EBIT) of $4.1 billion, a 22.0% increase year over year, and net income attributable to stockholders of $3.3 billion. GAAP diluted EPS rose to $3.73 from $1.35 a year earlier. North America contributed adjusted EBIT of $3.6 billion with an 8.7% margin. Revenue exceeded the prior year’s $48.6 billion, surpassing consensus estimates for both revenue and adjusted EPS.
GM narrowed its full-year adjusted EBIT guidance to a range of $14.5 billion to $15.5 billion and tightened adjusted diluted EPS guidance to $12.75 to $13.75. It raised its annual adjusted automotive free-cash-flow outlook to $11.5 billion to $12.5 billion. The company also set a net income range of $8.9 billion to $9.5 billion, automotive operating cash flow between $17.3 billion and $20.3 billion, and GAAP diluted EPS from $9.72 to $10.72.
Management now models about $2.0 billion in commodity inflation, including logistics and DRAM memory-chip costs, expects gross tariff costs at the low end of a $2.5 billion to $3.5 billion range, and anticipates roughly $500 million in regulatory benefits. The midpoint of the revised adjusted EPS guidance, $13.25, is below analysts’ consensus of $13.41. GM indicated that next year’s results should improve if consumer demand holds and commodity and logistics costs moderate.
Capital Returns and Cash Flow
GM’s automotive segment generated adjusted free cash flow of $5.9 billion in the quarter, up from $4.2 billion a year earlier. The company repurchased $2.5 billion of shares and retired 29 million shares during the period. Earlier in the year, GM completed a $6.0 billion repurchase program. The board approved a new multiyear $20.0 billion repurchase authorization with no expiration date, subject to securities laws and the board’s discretion to suspend or discontinue it.
The board also declared a quarterly cash dividend of $0.18 per common share, payable Dec. 17, 2026, to shareholders of record at the close of trading on Dec. 4, 2026.
Costs and Electric Vehicle Restructuring
GM recorded $238 million in third-quarter charges mainly related to resizing its battery supply chain with joint-venture partners. U.S. electric vehicle (EV) sales fell to 25,473 units from 66,501 a year earlier. GM Financial reported third-quarter net income of $487 million, down from $589 million in the prior year.
The company cited commodity, logistics, tariff, and memory-chip costs as significant constraints. It expects EV losses to improve by $1.0 billion to $1.5 billion in 2026. The raised free-cash-flow outlook supports the board’s capital-return plan despite elevated cost assumptions that narrowed profit guidance.
