GM shares fall despite doubled profit and a new buyback
GM more than doubled quarterly profit, but how much will rising material and fuel costs absorb?
On October 20, General Motors reported $3.3 billion in quarterly profit and a $20 billion buyback plan, while warning of higher commodity costs.
General Motors reported third-quarter profit of $3.3 billion, more than double a year earlier, as revenue rose 2.9% to $50.1 billion. [11] But CFO Paul Jacobson said higher copper, steel and diesel prices linked to the US-Iran war were adding $400 million to 2026 costs; shares were down 8.1% in aft…
General Motors reported third-quarter profit of $3.3 billion, more than double a year earlier, as revenue rose 2.9% to $50.1 billion. [11] But CFO Paul Jacobson said higher copper, steel and diesel prices linked to the US-Iran war were adding $400 million to 2026 costs; shares were down 8.1% in afternoon trading. [11] GM also announced a $20 billion share repurchase plan and raised the midpoint of its full-year adjusted earnings outlook, although Briefing.com said that midpoint remained below Wall Street expectations. [11]
Why it matters: GM provides a concrete example of conflict-related commodity inflation reaching company margins: stronger reported earnings and shareholder payouts did not outweigh investors' concerns about future costs. Its comparison with last year also needs care because the earlier quarter included one-time costs tied to unwinding electric vehicle investments. [11]
Key insights: The profit increase partly reflects a weaker comparison period, rather than an equivalent improvement in underlying trading. [11] | Average vehicle prices reached $52,000, above the prior year, even as North American sales volumes declined; GM cited sustained demand for large trucks and luxury vehicles. [11] | The new $20 billion repurchase authorization follows completion of a $6 billion plan, continuing GM's effort to translate operating performance into stronger per-share results. [11] | Mary Barra's expectation that 2027 will outperform 2026 was conditional on strong customer demand and moderating commodity, logistics and other recent cost pressures. [11]
Cheatsheet facts: What happened: GM earned $3.3 billion in the third quarter, more than twice the year-earlier figure, but its shares fell 8.1% in afternoon trading. [11] | Who pays: GM said higher copper, steel and diesel prices were adding $400 million to its costs for 2026. [11] | The catch: The revised full-year adjusted earnings range was $12.75–$13.75 a share; its midpoint rose but remained below analyst expectations, according to Briefing.com. [11] | What's next: GM plans revamped 2027 Chevrolet Silverado and GMC Sierra pickups; launch-related expenses are among the pressures identified by Briefing.com. [11]