General Motors just delivered a classic Wall Street curveball: strong earnings, a richer dividend, and a massive new buyback—all while quietly wrestling with serious electric vehicle headwinds.
The result?
Shares jumped more than 4% in premarket trading, investors cheered management’s confidence, and GM reminded markets why it remains the top-selling automaker in the United States.
But beneath the headline wins, a more complex story is unfolding.
Earnings Beat, Even as Revenue Slips
GM’s fourth-quarter results extended its impressive run of outperforming expectations:
Revenue: $45.29 billion (slightly below the $45.37 billion estimate, down 5.1% YoY)
Adjusted EPS: $2.51 vs. $2.28 expected
Adjusted EBIT: $2.84 billion vs. $2.77 billion expected
In a market where margins matter more than growth, GM showed it can still extract profits even as sales soften.
Management’s Confidence Shows: Dividend Hike + $6B Buyback
With expectations rising, GM’s board rewarded shareholders:
Quarterly dividend raised by $0.03 to $0.18 per share
New $6 billion stock buyback authorization
This is not defensive behavior—it’s a clear signal that management believes cash flows will remain strong.
CEO Mary Barra reinforced that message:
“We expect the US new vehicle market will continue to be resilient, and 2026 should be an even better year for GM.”
Bold 2026 Outlook: Margins Back in Focus
GM’s forward guidance paints a confident picture:
2026 Projections
Adjusted EBIT: $13.0B – $15.0B
Adjusted automotive free cash flow: $9.0B – $11.0B
Adjusted EPS: $11.00 – $13.00
North America margins expected to return to 8–10%
For investors, this matters more than any single quarter—it suggests GM sees operational stability, even in a choppy macro environment.
2025: GM Beat Its Own Playbook
GM didn’t just meet guidance—it beat it:
Adjusted EBIT: $12.7B (vs. $12–13B guided)
Automotive free cash flow: $10.6B
Adjusted EPS: $10.60 (above the high end of guidance)
That consistency is why GM stock continues to attract long-term capital despite industry uncertainty.
Tariffs: Less Pain Than Expected—For Now
One of GM’s quiet wins was managing tariff exposure:
Actual 2025 tariff impact: $3.1B
Earlier projection: $3.5B–$4.5B
White House MSRP tariff offsets helped cushion the blow and allowed GM to raise profit guidance last year.
However, the road ahead isn’t tariff-free.
2026 headwinds include:
$3.0B–$4.0B in additional tariff costs
$1.0B–$1.5B from commodity and FX pressures
$1.0B–$1.5B from onshoring and operational costs
GM is betting that scale, pricing discipline, and localization will offset much of that pressure.
The EV Reality Check: Losses Improve, Demand Doesn’t
This is where the narrative turns.
GM acknowledged that EV unit losses should improve by $1.0B–$1.5B, helped by:
$550M–$750M in regulatory benefits
Savings from no longer buying emissions credits
But the broader EV story remains painful.
Earlier this month, GM took:
A $6B EV charge, citing softer demand and the loss of the federal EV tax credit
On top of $1.6B in Q3, bringing total EV write-downs to $6.6B
GM says EV-related charges in 2026 will be “material, but significantly smaller.” Investors will be watching closely.
Sales Snapshot: Trucks Save the Day
While EVs struggled, GM’s core business thrived:
Q4 US sales: Down 6.9% YoY to ~703,000 vehicles
Full-year 2025 US sales: Up 5.5% to 2.85 million vehicles
GM remained the top-selling automaker in the US
Bright spots:
Full-size pickup sales up for the sixth straight year—best performance in 20 years
Full-size SUVs (Tahoe, Suburban, Yukon) led the segment for the fifth consecutive year
The dark spot:
EV sales plunged 43% in Q4 to just over 25,000 units
A Q3 “pull-forward” ahead of the EV tax credit expiration crushed Q4 demand
The Bottom Line
General Motors is executing exceptionally well where profits are real today—trucks, SUVs, pricing discipline, and shareholder returns.
At the same time, its EV ambitions are being reset, resized, and rewritten in response to market reality.
For investors, the message is clear:
GM is no longer chasing hype
It’s prioritizing cash flow, margins, and shareholder value
And it’s proving that even in a disrupted auto industry, old-school execution still wins
Whether the EV pivot eventually reignites growth remains an open question—but for now, Wall Street likes what it sees.