GM raises free cash flow outlook, announces $20 billion buyback
General Motors beat third-quarter earnings and revenue estimates, tightened its 2026 earnings guidance, and raised its free cash flow outlook, supported by truck profits and software services.
On the Dash:
- GM reported adjusted earnings of $3.70 per share on $50.02 billion in revenue, beating Wall Street estimates, while North American operations generated $3.6 billion of its $4.1 billion in quarterly adjusted EBIT.
- The automaker expects 2026 adjusted automotive free cash flow of $11.5 billion to $12.5 billion, up from its previous range of $9.5 billion to $11.5 billion, despite commodity inflation and warranty costs.
- GM is preparing major product launches, including redesigned Chevrolet Silverado and GMC Sierra pickups, while expanding Super Cruise availability and software revenue opportunities for dealers to discuss with customers.
According to LSEG, analysts expected General Motors’ adjusted earnings of $3.63 per share, but the automaker earned an adjusted $3.70 per share in the third quarter. Revenue totaled $50.02 billion, topping expectations of $48.7 billion, and net income attributable to stockholders rose to $3.3 billion from $1.3 billion a year earlier.
GM also narrowed its 2026 adjusted EBIT outlook to $14.5 billion to $15.5 billion, down from $14 billion to $16 billion. Simultaneously, the automaker raised its adjusted automotive free cash flow guidance to between $11.5 billion and $12.5 billion, up from $9.5 billion to $11.5 billion. Additionally, the GM board authorized a new multiyear stock buyback program worth $20 billion after completing the $6 billion repurchase program announced in January. The new program has no expiration date, and GM said it may suspend or discontinue the buyback at any time.
Adjusted automotive free cash flow climbed 40% to $5.9 billion during the quarter, strengthening GM’s ability to return capital to shareholders. North America drove the profit, generating $3.6 billion of GM’s $4.1 billion in adjusted EBIT.
Trucks & SUVs continue to drive North American earnings
Looking ahead, GM is preparing to launch the all-new 2027 Chevrolet Silverado and GMC Sierra light-duty pickups, followed by next-generation heavy-duty pickups and full-size SUVs. The company plans to expand truck production and add more models with premium V-8 engines. These plans underscore the importance of high-margin trucks and SUVs, even as GM’s U.S. sales declined.
However, inflation, tariffs and warranty expenses continue to pressure GM. The company expects commodity inflation costs of about $2 billion, at the high end of its previous guidance, while it expects gross tariff costs to land at the low end of its $2.5 billion to $3.5 billion range. Meanwhile, warranty costs should reach the high end of the $1 billion to $1.5 billion range.
Inflation, tariffs & warranty expenses remain
In a letter to shareholders, CEO Mary Barra said GM is working to offset inflation through product investments, improved quality, and greater operational efficiency. The company also expects to approach $7.5 billion in margin-accretive deferred revenue from software and services for the full year. Additionally, Super Cruise will become standard on high-end Silverado and Sierra trims and optional on most other trims in 2027, and GM expects Super Cruise penetration across its truck lineup to increase fourfold to fivefold next year. GM is also developing highway autonomous technology, which is expected to debut on the Cadillac Escalade IQ in 2028.
For EVs, GM said it has substantially completed the costs of its previously announced investment pullback. The company has recorded $11.2 billion in related charges since the second half of last year and has paid $4.6 billion of the $7.4 billion in cash costs through the third quarter. However, GM continues to invest in battery technology, including lithium manganese-rich batteries.
In China, GM’s equity income totaled $32 million in the third quarter, down 60% from a year earlier. Overall, the company remains focused on North American operations, core vehicle segments and software-based services as it pursues long-term growth in earnings and cash flow.