GM Stock Drops 5% Despite Q3 Earnings Beat — Automaker Keeps Profit Outlook Unchanged, Unveils $20B Buyback

• GM's third-quarter EPS rose 32.2% year over year to $3.70 per share, while revenue increased 2.9% to $50.02 billion.
• The automaker’s North American adjusted operating profit surged 43.4%, even as U.S. vehicle sales and market share declined.
• GM approved a new $20 billion multiyear share buyback program after completing its previous $6 billion program.

General Motors (GM) shares fell over 5% in Tuesday's premarket despite the company reporting better-than-expected third-quarter (Q3) earnings and announcing a new $20 billion share repurchase program.

The Detroit-based automaker reported third-quarter adjusted earnings per share (EPS) of $3.70, above analysts' consensus estimate of $3.63, while revenue rose 2.9% year over year to $50.02 billion, surpassing the $48.76 billion consensus, according to FiscalAI data.

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GM’s net income attributable to stockholders climbed to $3.34 billion from $1.33 billion a year earlier as it reported its best Q3 full-size pickup sales ever, driven by commercial demand, while year-to-date fleet sales reached their highest level since 2019.

While revenue and adjusted EPS beat estimates, GM kept its full-year adjusted operating profit guidance midpoint unchanged at $15 billion and raised its commodity cost outlook, potentially weighing on investor sentiment.

Stronger Truck Sales, Lower Costs Lift North American Margins

GM's North American adjusted operating profit jumped 43.4% to $3.59 billion, with margins expanding to 8.7% from 6.2% a year earlier. 

According to the company's earnings presentation, higher wholesale volumes, a favorable mix of full-size pickups, improved warranty costs and electric vehicle (EV) inventory adjustments supported profitability.

However, U.S. vehicle deliveries fell 5.5% to approximately 671,000 units, while market share declined to 16.1% from 16.8%. GM attributed weaker global deliveries primarily to lower EV sales and discontinued models.

The automaker also reported adjusted automotive free cash flow of $5.88 billion, up 40% year over year.

GM Authorizes $20B Buyback, Lifts Cash Flow Outlook

GM approved a new $20 billion multiyear share repurchase program after completing its previous $6 billion program. Meanwhile, it will pay a quarterly dividend of $0.18 per share on December 17, 2026.

The company also raised its full-year adjusted automotive free cash flow guidance to between $11.5 billion and $12.5 billion, from its earlier forecast of $9.5 billion to $11.5 billion.

GM also narrowed its full-year adjusted EPS guidance to between $12.75 and $13.75 from $12 and $14 earlier. The automaker now expects approximately $2 billion in commodity inflation, including logistics and memory costs, compared with its previous estimate of up to $2 billion.

GM Targets Stronger 2027 With Super Cruise Expansion

GM management expects 2027 to outperform 2026, provided customer demand remains strong and commodity, logistics and other cost pressures moderate. CEO Mary Barra said GM is on track to approach $7.5 billion in deferred revenue from software and services by year-end. 

Barra expects Super Cruise penetration across GM's truck portfolio to grow four to five times in 2027, supported by the launch of the new Chevrolet Silverado and GMC Sierra, which will offer the technology as standard on higher-end trims.

What Retail Thinks of GM Stock

As of this writing, GM stock was down more than 5% in premarket trading and was among the top trending tickers on Stocktwits. Retail investors’ sentiment around the stock remained ‘bullish’ on the platform amid high message volume.

So far this year, GM stock has risen over 2%. By comparison, the Vanguard S&P 500 ETF (VOO), which holds the stock, has risen over 12% during this period.

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