GM Beats Earnings Expectations But Stock Drops 5% on Cautious Outlook

General Motors (GM), the big American carmaker based in Detroit, just shared how it performed over the last three months — and the results were a mixed bag.

The company earned more money than experts predicted, but its stock price still fell about 5%. Why? Because investors were worried about GM's forecast for the future, which wasn't as strong as they hoped.

Here's how GM did in the third quarter (July–September):

• Earnings per share (profit for each share of stock): $3.70 — better than the $3.63 expected
• Revenue (total money from sales): $50.02 billion — beating the $48.7 billion expected
• Net income (profit after all costs): $3.3 billion — up about $2 billion from a year ago

A big announcement: a $20 billion stock buyback. This means GM plans to buy back its own shares from the stock market. Buybacks usually help existing shareholders because fewer shares exist, making each remaining one more valuable.

So why did the stock drop? GM gave its outlook (its prediction for full-year profits), and it was slightly weaker than Wall Street wanted. GM expects to earn $12.75 to $13.75 per share, with a midpoint of $13.25 — below the $13.41 analysts were hoping for.

GM is also dealing with rising costs:

• About $2 billion in commodity inflation (higher prices for materials, shipping, and computer memory chips)
• Up to $3.5 billion in tariff costs (taxes on imported goods)
• Up to $1.5 billion in warranty costs (repairs covered for customers)

Most of GM's profit still comes from North America, which made $3.6 billion of its $4.1 billion in adjusted EBIT (earnings before interest and taxes — a measure of operating profit).

GM also said it has nearly finished absorbing the $11.2 billion in costs from pulling back on its electric vehicle plans announced last year.

The bottom line: GM is performing solidly today, but investors are nervous about rising costs squeezing profits in the year ahead.

This is an AI-generated summary. Read the original article at: https://www.cnbc.com/2026/10/20/general-motors-gm-earnings-q3-2026.html