General Motors has exceeded Wall Street's expectations for the third quarter, prompting the Detroit-based automaker to adjust its financial forecasts. The company has narrowed its 2026 earnings guidance and increased its outlook for adjusted automotive free cash flow. This comes as GM announced a new multiyear stock buyback program valued at $20 billion, succeeding a $6 billion share repurchase initiative completed earlier this year.
GM's new guidance includes adjusted earnings before interest and taxes (EBIT) of between $14.5 billion and $15.5 billion, with adjusted earnings per share (EPS) between $12.75 and $13.75. This compares to its previous guidance of $14 billion to $16 billion in adjusted EBIT and $12 to $14 in adjusted EPS. The company's adjusted automotive free cash flow is now projected to be between $11.5 billion and $12.5 billion, up from the earlier estimate of $9.5 billion to $11.5 billion.
Despite these positive results, GM's stock saw a decline of approximately 5% during premarket trading. Analysts had mixed expectations ahead of the report, with concerns about slowing sales and rising commodity costs. GM has indicated that it anticipates commodity inflation costs to reach around $2 billion, at the high end of its previous guidance. This includes increased expenses for logistics and dynamic random-access memory (DRAM) chips, which have been affecting multiple industries.
While inflationary costs are at the higher end, GM expects its gross tariff costs to be at the lower end of the anticipated $2.5 billion to $3.5 billion range. Warranty costs, however, are expected to be at the high end, between $1 billion and $1.5 billion. Vehicle pricing remains relatively stable despite rising inflationary pressures. He noted that the company would evaluate consumer behavior in the coming year to determine if further price increases are necessary.
In a letter to shareholders, GM CEO Mary Barra emphasized the company's strong performance amid inflationary challenges. She highlighted strategic investments in new products and services, as well as enhanced quality and operational efficiency, as key factors in maintaining momentum. The automaker has also made significant progress in its pullback from all-electric vehicles, recording $11.2 billion in related charges since the latter half of last year.
GM's net income attributable to stockholders reached $3.3 billion in the third quarter, marking an increase of approximately $2 billion compared to the same period last year. The company's North American operations were a major contributor, accounting for $3.6 billion of the $4.1 billion in adjusted EBIT results.
