A 2026 Chevrolet Colorado Trail Boss truck. (Graham Hughes/Bloomberg)
key takeaways:
- General Motors raised its 2026 adjusted EBIT outlook by $500 million to $14 billion-$16 billion after second-quarter earnings and revenue topped estimates.
- Higher margins on larger vehicles and lower tariff costs helped offset weak U.S. sales, while GM recorded an additional $2.3 billion in EV-related charges.
- GM reduced production of all electric vehicles, bringing total EV write-downs to $11 billion, and repurchased shares worth $2 billion during the quarter.
General Motors Co. raised its full-year profit forecast by another $500 million after beating second-quarter earnings estimates due to stronger margins on its biggest vehicles and lower tariff costs.
The Detroit automaker said July 21 it now expects earnings before interest and taxes this year to reach $16 billion. The upgraded estimates came after GM said it earned $3.57 per share, above Wall Street analysts’ consensus forecast of $3.19, after buying back more shares.
GM’s improved outlook came despite a tough second quarter, in which its U.S. sales declined, including large pickup trucks and SUVs that generate most of its earnings. The company has maintained profits by keeping inventory low and maintaining high prices on its most profitable models. CEO Mary Barra said she thinks this positive momentum will continue next year.
“We expect these trends to continue to underpin our performance in 2027 and beyond as we have multiple engines of margin expansion and growth while maintaining our capital discipline,” Barra said in his quarterly letter to shareholders.
Adjusted earnings before interest and taxes this year will be between $14 billion and $16 billion, up from the $13.5 billion to $15.5 billion forecast for 2026 made in April and the $13 billion to $15 billion forecast in January.
GM cut its expected net income by at least $1.5 billion to a range of $9.9 billion to $11.4 billion due to electric vehicle-related charges. The company added $2.3 billion to those charges as it reduced production of all-electric models. That brings GM’s total EV write-downs to $11 billion as it returns to its once aggressive electrification strategy.
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The carmaker said it had net income of about $1.3 billion in the second quarter, down from $1.9 billion a year earlier, partly due to those charges.
GM shares rose 1.3% to $76.75 in premarket trading as of 7:15 a.m. in New York. The stock closed down 6.8% this year on July 20.
Revenue for the three-month period came to $48.03 billion, compared with analysts’ expectations of $46.61 billion. This came as its sales declined 4.2% in the previous quarter due to weak demand for its best-selling trucks and the Equinox crossover SUV. In the first six months, GM’s deliveries declined 6.8%.
The company’s China business equity earnings rose $83 million, up from $71 million a year earlier, but were down from $165 million in the first quarter.
It also said it bought back $2 billion of shares in the quarter ended June 30.
