General Motors shares surge as earnings beat expectations, profit guidance raised

Investing.com -- General Motors (NYSE:GM) reported better-than-expected third-quarter earnings on Monday, prompting the automaker to raise its full-year profit outlook despite ongoing challenges in the electric vehicle market. The company’s shares surged over 11% at the open following the announcement.

GM posted adjusted earnings of $2.80 per share for the third quarter, significantly exceeding analyst expectations of $2.32. Revenue came in at $48.59 billion, also beating the consensus estimate of $45.33 billion, though this represented a slight 0.3% decrease from the $48.76 billion reported in the same quarter last year.

The Detroit-based automaker raised its full-year adjusted earnings guidance to between $9.75 and $10.50 per share, up from its previous forecast of $8.25 to $10.00 and above the analyst consensus of $9.45. The company also increased its adjusted automotive free cash flow outlook to $10.0-$11.0 billion from $7.5-$10.0 billion previously.

"We’re delivering on our commitments while strategically realigning our EV capacity to meet consumer demand," said GM Chair and CEO Mary Barra in her letter to shareholders.

Despite the strong financial performance, GM’s quarterly EBIT-adjusted fell 18% YoY to $3.38 billion, with margins declining to 6.9% from 8.4% in the year-ago period. The company’s North American operations saw EBIT-adjusted drop 37.1% to $2.51 billion.

The results included $1.59 billion in charges related to GM’s EV strategic realignment and $300 million associated with investigations into its OnStar Smart Driver product.

GM’s wholesale vehicle sales declined 5.4% YoY to 977,000 units in the quarter, though the company increased its U.S. market share to 17.0% from 16.5% a year earlier.

The automaker’s financial services arm, GM Financial, delivered a strong performance with earnings before taxes rising 17% to $804 million compared to the same period last year.

"We believe this was a strong report," said Goldman Sachs analyst Mark Delaney following the earnings release. "GM commented in its slide deck it expects 2026 to be better than 2025."

Meanwhile, Jefferies analyst Philippe Houchois stated that it was "another strong quarter," with the analyst also noting a "better pricing offset."

UBS’s Joseph Spak expected a "favorable reaction, especially given the heightened amount of investor concern around the quarter."

"GM continues to socialize that 2026 will be a stronger year than 2025 with a top priority to restore GMNA EBIT margins to 8-10%," added Spak. 

Finally, TD Cowen analyst Itay Michaeli told investors that the 2025 FCF guidance raise "perhaps most impressive," and they "expected de-stocking this year."