General Motors raised its profit outlook for 2026 as it reported higher fourth-quarter core profit on Tuesday on robust sales of its large pickup trucks and SUVs, sending shares of the Detroit automaker up four per cent in premarket trading.
Its adjusted pre-tax earnings surged about 13 per cent to US$2.84 billion in the quarter compared with about $2.51 billion a year ago. Earnings per share of $2.51 easily surpassed analyst expectations of $2.21.
The company expects an annual adjusted core profit of $13 billion to $15 billion in 2026, a range whose midpoint exceeds analyst expectation of $13.39 billion, according to LSEG data.
The brighter outlook comes despite an expected hit from higher commodity expenses and shortage of computer chips. GM said those factors, along with foreign-exchange headwinds, would hurt its profits by $1 billion to $1.5 billion this year.
GM’s net income was impacted by a $6 billion charge due to its electric-vehicle pullback in response to the Trump administration’s policies and fading demand.
A big share of the charge was tied to contract cancellations and settlements with suppliers, who had planned for much higher production volumes before the market turned.
North American demand boosts quarter
The gains during the quarter were driven by demand from its core North American business, where it posted earnings of $2.24 billion, marginally lower than a year ago.
GM logged strong sales of its most lucrative vehicles during the quarter: big pickups, including the Chevrolet Silverado, and hulking SUVs, such as the Cadillac Escalade.
For 2026, the outlook for those big money makers has improved under a recent rollback of federal environmental regulations. The Trump administration last year froze penalties for automakers that fail to meet fuel-efficiency and tailpipe-emissions regulations.
GM said it should save as much as $750 million by not having to buy credits from EV makers such as Tesla to help comply with those rules.
Quarterly dividend boosted by 20 per cent
GM was optimistic for 2026 as it backed its EV strategy, raised its quarterly dividend payout by 20 per cent and approved a new $6 billion share buyback program. It repurchased roughly the same amount in 2025.
GM’s electric vehicle business has come under pressure after the Sept. 30 removal of a $7,500 consumer tax credit for EVs. Still, the company on Tuesday backed its EV strategy, saying it would work to reduce costs.
“From an EV perspective, we do believe that that is the end game. We’re continuing to work on cost improvements,” GM CEO Mary Barra said in an interview with CNBC Tuesday.
In China, the automaker trimmed losses to $513 million, from more than $4 billion a year ago, as it restructured business in the region after losing market share to Chinese rivals.
Despite the pressure, strong consumer demand for some of GM’s gas-powered trucks and SUVs helped it hold on to its top spot for new vehicle sales in 2025, even as higher borrowing costs have hurt affordability for first-time buyers.
Its overall quarterly revenue fell by 5.1 per cent to about $45.3 billion from a year ago.
(Reporting by Nathan Gomes in Bengaluru; Editing by Arun Koyyur and Bernadette Baum)
