AI-assisted research analysis by FutureKnowledge. Sources checked 20 October 2026. This is not investment advice.
Reviewed by FutureKnowledge: figures, dates and attributions were checked against the linked sources before publication.
General Motors reported a record quarterly revenue of $50 billion and higher profits on 20 October, raised its forecast for the cash its car business will generate this year and approved a new $20 billion share buyback. Investors still sold the stock. The reason sits in the detail: GM only narrowed, rather than raised, its full-year profit range, and management said rising prices for metals, freight and memory chips will decide whether 2027 can be a better year.
What happened
According to GM’s results release, also filed with the US securities regulator as a Form 8-K, July–September revenue rose 2.9% to $50.0 billion. Net income attributable to shareholders was $3.3 billion, against $1.3 billion a year earlier, when large electric-vehicle (EV) charges weighed on the result. EBIT-adjusted, GM’s preferred measure of operating profit, rose about 22% to $4.1 billion, a margin of 8.2%. Adjusted earnings per share rose 32% to $3.70.
That was slightly above expectations. Investing.com put the consensus at $3.69 a share, while BigGo Finance, citing LSEG data, and 24/7 Wall St. put it at $3.63. Either way, revenue beat forecasts of about $48.8 billion.
The guidance change
GM’s release shows three changes to its 2026 outlook:
- EBIT-adjusted is now $14.5–15.5 billion, narrowed from $14.0–16.0 billion. The $15 billion midpoint is unchanged.
- Adjusted earnings per share is now $12.75–13.75, from $12.00–14.00. Investing.com said the new $13.25 midpoint is below the analyst consensus.
- Adjusted automotive free cash flow is raised to $11.5–12.5 billion, from $9.5–11.5 billion.
The board approved a new $20 billion buyback with no expiry date, after GM completed a $6 billion programme announced in January. The quarterly dividend stays at 18 cents. Shares outstanding fell to 849 million at the end of September, from 904 million at end-2025.
The market reaction
GM shares fell between about 5% and 7% in early New York trading. 24/7 Wall St. reported a fall of about 6% to $77.87, with Ford down about 2%. BigGo described the problem: the market had expected a third upgrade to the profit outlook and got a narrower range instead.
Why it happened
Trucks carried the quarter
Almost all the profit growth came from North America. GM North America made EBIT-adjusted of $3.6 billion, up 43% from $2.5 billion, at an 8.7% margin. The earnings call transcript shows prices in North America were up $400 million so far this year, and warranty costs improved. GM is also launching the 2027 Chevrolet Silverado and GMC Sierra pickups, which its investor slides show with new V8 and diesel engines.
EVs and international business shrank
EV-related charges fell to $238 million, from $1.6 billion a year earlier. GM says it has now recorded $11.2 billion of these charges since the second half of 2025, $7.4 billion of it in cash. But EV demand is still weak after the US consumer tax credit ended in 2025. Eletric-vehicles.com reported that GM’s US EV sales fell about 62% to 25,473 units, or 3.8% of its US sales. Stocktwits reported that GM’s US market share slipped to 16.1% from 16.8%.
Outside North America, the business barely broke even. GM International made EBIT-adjusted of $28 million, against $226 million a year earlier. Income from GM’s China joint ventures fell to $32 million from $80 million. On the call, management linked part of the weakness to a mark-to-market loss of about $100 million on GM’s stake in Momenta, a Chinese self-driving software company, and to conflict in the Middle East.
Costs are the worry
The call explains the cautious outlook. GM expects about $2 billion of commodity, logistics and memory-chip (DRAM) cost inflation this year, roughly $1.3 billion of it already absorbed. Management noted record copper prices and steel at four-year highs. Gross tariff costs are expected at the low end of a $2.5–3.5 billion range, helped by refunds after the reversal of some emergency tariffs. Asked about 2027, the chief financial officer said “we would need prices to come off” for GM to be confident about growth.
How it affects carmakers and businesses
For the car industry, the quarter shows a model that is profitable but narrow. Large petrol and diesel pickups and SUVs in the United States pay for almost everything else, including EV losses, weak overseas units and buybacks. That works while US truck demand and prices hold up, and is fragile if input costs rise faster than prices.
The cost line matters beyond GM. Memory chips are now a named cost problem for a carmaker, alongside steel and copper, and GM said logistics costs show up in its accounts within weeks.
Cash returns are now central to GM’s case. But on the call, analysts asked why cash flow may not rise in step with earnings in 2027, when the remaining EV cash charges are due.
Who is more or less exposed
- More exposed: carmakers and suppliers that rely on high-margin US trucks and SUVs, if demand or pricing softens; companies with big electronics content and little pricing power, as memory costs rise; foreign carmakers whose overseas units already run close to break-even.
- Less exposed: firms that have already absorbed EV write-downs and cut capacity; suppliers that can pass metal costs through contracts linked to indices.
Scenarios to watch
These are conditional scenarios, not predictions.
| If this happens | What it could mean |
|---|---|
| Copper, steel and memory prices ease in the first half of 2027 | GM’s statement that 2027 can outperform 2026 becomes easier to meet, and cost guidance could improve. |
| Input prices stay at current levels | The roughly $2 billion headwind could recur, putting more pressure on truck pricing to protect margins. |
| US truck demand weakens as rates rise | The segment that funds GM’s buybacks and EV losses would shrink, testing the new cash forecast. |
| US EV sales stay near current levels | Further cuts to EV capacity, or more charges, become more likely across Detroit carmakers. |
What to watch next
- GM’s fourth-quarter result, including the cost of switching its pickup plants to the new trucks. Management expects about 35,000 fewer full-size pickups in the quarter.
- Upcoming results from Ford and Tesla, for evidence on US pricing, EV demand and memory costs.
- Monthly copper, steel and DRAM contract prices.
- The pace of buybacks under the new $20 billion programme.
Bottom line
GM’s third quarter was strong on the numbers that the company controls: pricing, warranty and cash. The share fall reflects what it does not control. With EVs and overseas units contributing little, profit depends on US trucks, and the outlook for 2027 depends on metal, freight and chip costs coming down.
Method note: We compared GM’s 20 October results release and SEC Form 8-K (primary sources) and its investor slides with reporting and transcripts from Investing.com, 24/7 Wall St. (via AOL), BigGo Finance, Stocktwits and Eletric-vehicles.com. Analysts’ consensus figures differ between providers, and we show both. Share price moves are intraday and may change by the close.