GM Beats Earnings Estimates, but Shares Slide as Chip and Commodity Costs Squeeze Outlook

General Motors reported third-quarter revenue and profit above Wall Street's expectations on Tuesday, but its stock fell sharply after the company left the midpoint of its full-year earnings guidance unchanged and flagged rising commodity and memory-chip costs heading into the final months of the year.

The Detroit automaker's third-quarter earnings release, filed with the Securities and Exchange Commission, showed revenue of $50.0 billion for the quarter ended September 30, up from $48.6 billion a year earlier, and net income attributable to stockholders of $3.3 billion, more than double the $1.3 billion GM earned in the same period last year. Adjusted earnings before interest and taxes came to $4.1 billion, up 21.6 percent, and adjusted diluted earnings per share were $3.70, up from $2.80. Those figures topped the consensus analysts surveyed by LSEG had expected — adjusted earnings of $3.63 a share on revenue of roughly $48.7 billion, according to a count cited by CBT News. The underlying numbers were confirmed in GM's quarterly report filed on Form 10-Q, which put diluted earnings per share on a GAAP basis at $3.73, against $1.35 a year earlier.

A Beat That Investors Shrugged Off

Despite the headline numbers, GM shares fell by roughly 6 to 7 percent in trading after the report, a reaction several outlets tied to the fact that the company's guidance, while narrowed, kept the same midpoint it had set in July. GM now expects full-year adjusted EBIT of $14.5 billion to $15.5 billion, versus a prior range of $14.0 billion to $16.0 billion, and adjusted earnings per share of $12.75 to $13.75, versus $12.00 to $14.00 previously — both ranges centered on the same number as before. The company did raise its forecast for adjusted automotive free cash flow, to $11.5 billion to $12.5 billion from $9.5 billion to $11.5 billion, according to the 8-K filing accompanying the release. A report from 24/7 Wall St put GM shares down roughly 6 percent to around $77.87 in morning trading, noting that the unchanged midpoint, rather than the quarter itself, appeared to be driving the selloff.

Commodity and Memory-Chip Costs Weigh on the Outlook

GM said commodity inflation, which it has previously tied in part to rising prices for DRAM memory chips used in vehicle electronics, is now tracking toward the top of its prior guidance range, close to $2 billion for the year, per the cost detail reported by CBT News from the release. Tariff costs, by contrast, are expected to land at the low end of a previously disclosed $2.5 billion to $3.5 billion range, while warranty costs are expected at the high end of a $1 billion to $1.5 billion range. The memory-chip pressure echoes a broader industry trend: a handful of producers, including Samsung Electronics, SK Hynix and Micron, control the large majority of global DRAM supply, and all three have been prioritizing higher-margin orders tied to artificial-intelligence data centers over the kind of commodity memory chips automakers use, pushing up costs for carmakers that have little pricing leverage of their own.

Uneven Performance Across Regions and Businesses

The quarter's strength was concentrated in North America, where adjusted operating profit rose 43.4 percent to $3.6 billion, an 8.7 percent margin, driven by trucks and SUVs. Results outside North America told a different story: adjusted operating profit in GM's international segment fell 87.7 percent to $28 million from $226 million a year earlier, and equity income from GM's joint ventures in China dropped 60.3 percent to $32 million as the company's China market share slipped to 6.6 percent from 6.8 percent. GM Financial, the company's lending arm, posted adjusted pretax income of $668 million, down 16.9 percent. The company also continued absorbing the cost of scaling back electric-vehicle production: it recorded $238 million in EV-related strategic realignment charges in the quarter alone, part of $11.2 billion in such charges taken since the second half of 2025, of which $4.6 billion of an expected $7.4 billion in cash costs had been paid out by the end of September. Workers at GM's North American truck and SUV plants are the clearest beneficiaries of the quarter's strength, while the EV charges continue to affect battery and assembly operations tied to the company's electric lineup, and GM Financial's results point to softening consumer credit performance.

Buybacks, Dividend and the Road Ahead

GM's board approved a new $20 billion, multiyear share-repurchase authorization with no expiration date, which the company said it can suspend or end at any time, following completion of a $6 billion buyback program launched in January. The company also declared a quarterly dividend of $0.18 per share, payable December 17 to shareholders of record as of December 4. Shares outstanding have fallen to 849 million as of September 30, from 904 million at the end of 2025, 995 million at the end of 2024 and 1.2 billion at the end of 2023, reflecting several years of sustained buybacks that have concentrated earnings among fewer remaining shares — a dynamic some analysts flagged, per a summary of the earnings call carried by GuruFocus, as a central feature of GM's capital-return strategy this year.

GM's report lands in the middle of a broader run of automaker earnings this week, with Ford also reporting and Tesla's results still to come. Ford shares slipped about 2 percent the same day, a smaller decline that outlets attributed to its own mix of gas-powered truck profits, while Tesla shares were roughly flat, reflecting its business model's lack of exposure to the commodity and chip costs weighing on traditional automakers. GM executives are scheduled to discuss the results further and may provide additional detail on cost trends and EV plans on upcoming investor calls, while the company's next full guidance update is expected alongside its fourth-quarter results early next year.

• Q3 2026 revenue: $50.0 billion, up from $48.6 billion a year earlier
• Net income attributable to stockholders: $3.3 billion, versus $1.3 billion a year earlier
• Adjusted EPS: $3.70, beating a $3.63 consensus estimate; GAAP diluted EPS: $3.73
• New $20 billion share-buyback authorization; quarterly dividend held at $0.18 per share