GM Shares Sink 7% as Narrowed Full-Year Profit Outlook Overshadows Q3 Beat and $20 Billion Buyback

General Motors reported third-quarter revenue of $50.02 billion and adjusted earnings per share of $3.70 on October 20, topping Wall Street estimates of $48.53 billion and $3.56 respectively. Net income surged to $3.34 billion, or $3.73 per share, more than doubling from $1.33 billion, or $1.35 per share, in the same period a year earlier. Adjusted EBIT rose 21.6% year over year to $4.11 billion, though that figure came in below the consensus estimate of roughly $4.24 billion. Vehicle sales reached 1.03 million units, beating the estimate of about 982,500.

The earnings beat was driven almost entirely by North American operations, where adjusted EBIT jumped 43.4% to $3.59 billion on an 8.7% margin, two and a half percentage points better than a year ago. International operations were a notable weak spot, with adjusted EBIT collapsing 87.7% to just $28 million against an estimate of $130.4 million. GM Financial posted net income of $487 million for the quarter, down from $589 million a year earlier.

For full-year 2026, GM narrowed its adjusted EPS guidance to $12.75 to $13.75, tightening the previous range of $12 to $14. The midpoint of $13.25 fell below the analyst consensus of roughly $13.41, which investors took as a disappointment. The company also narrowed its adjusted EBIT range to $14.5 billion to $15.5 billion from $14 billion to $16 billion, while raising its adjusted automotive free cash flow outlook to $11.5 billion to $12.5 billion from a prior range of $9.5 billion to $11.5 billion. Management cited approximately $2 billion in higher commodity costs this year, driven by logistics and computer chip prices, as a key headwind.

Alongside the results, GM's board approved a new $20 billion multi-year share repurchase program after completing its previous $6 billion buyback. The company has repurchased $29.5 billion in shares since 2023. CFO Paul Jacobson, speaking on CNBC, described the buyback as driven by the company's free cash flow generation and said GM views its own stock as a strong investment for shareholders. CEO Mary Barra highlighted upcoming products including the 2027 Chevrolet Silverado and pointed to software and services, including the Super Cruise driver-assistance platform, as a longer-term growth opportunity the company pegs at $7.5 billion.

Despite the headline beats, GM shares fell roughly 6% to 7% on the day, trading as low as $75.08 and crossing below their 200-day moving average of $80.69. The stock was on pace for its worst single-day decline in 15 months. Ford edged modestly lower in sympathy while Tesla was largely unchanged. A former GM board member also flagged the company's limited hybrid lineup as an issue requiring urgent attention.