General Motors shares jumped more than 9% on Tuesday after the automaker raised its annual core profit forecast, citing a lower-than-expected impact from tariffs and resilient demand for trucks and SUVs.
“Thanks to the collective efforts of our team, and our compelling vehicle portfolio, GM delivered another very good quarter of earnings and free cash flow,” GM CEO Mary Barra said Tuesday in a shareholder letter.
“Based on our performance, we are raising our full-year guidance, underscoring our confidence in the company’s trajectory.”
The company now expects annual adjusted earnings before interest and taxes (EBIT) of between $12 billion and $13 billion, up from an earlier projection of $10 billion to $12.5 billion.
Adjusted earnings per share for 2025 are forecast in the range of $9.75 to $10.50, compared with the previous $8.25 to $10.00 outlook.
GM’s third-quarter adjusted earnings per share came in at $2.80, easily surpassing analysts’ expectations of $2.31, according to LSEG data.
Quarterly revenue rose to $48.59 billion, ahead of the $45.26 billion estimate.
Adjusted operating income reached $3.4 billion, topping Wall Street’s forecast of $2.7 billion.
However, net income fell by more than half, prompting GM to lower its net income guidance by as much as $1.2 billion.
Strong performance despite tariff headwinds
The better-than-expected results were driven by strong US sales and stable pricing in the face of ongoing tariff pressures.
GM said it expects tariffs to cost about $4.5 billion in 2025, around $500 million less than previously projected, as it boosts domestic production of high-margin trucks.
Automakers received a boost late last week when President Trump announced an extension of a relief measure that offsets tariffs on vehicle parts assembled in the US.
Barclays analysts estimate the move could save GM and Ford about $500 million each in 2026.
Chief Executive Mary Barra, in a letter to shareholders, welcomed the relief, saying it would “help make US-produced vehicles more competitive over the next five years.”
She also highlighted plans to manufacture a new generation of V-8 engines at a factory in New York.
Still, the administration’s decision to impose fresh tariffs on medium- and heavy-duty trucks assembled in Mexico from November 1 could hit GM and Stellantis, both of which produce large trucks south of the border.
GM also builds heavy-duty models in Flint, Michigan, which may offset some of the impact.
Scaling back EV ambitions amid policy changes
GM’s electric vehicle strategy is being recalibrated after overinvestment in the segment.
Although the company sold a record number of EVs during the quarter, the expiration of the $7,500 federal tax credit on September 30 has sharply reduced consumer demand.
Republicans’ repeal of the subsidy has led to an expected 50% drop in full-electric vehicle sales, according to Ford’s chief executive, undermining GM’s earlier target of narrowing EV losses by $4 billion this year.
GM said its decision to scale back EV production will begin to pay off in 2025, as it focuses on profitability in its traditional truck and SUV lineup.
The company has also benefited from Trump’s rollback of stringent fuel economy rules, which had pressured automakers to ramp up electric and hybrid production or buy emissions credits from rivals like Tesla.
Outlook buoyed by pricing and demand
Despite the political and regulatory turbulence, GM’s overall business remains robust.
Sales to retail and fleet customers are up more than 10% this year, while flagship models such as the Cadillac Escalade have seen sales climb 28%.
By holding vehicle prices steady, GM has expanded its market share even amid tariffs and shifting EV policies.
Analysts say the combination of strong demand, tariff relief, and disciplined cost management positions GM for solid earnings growth in 2025.
Shares of General Motors were up 9% on Tuesday, extending their recent rally and signaling investor confidence in the automaker’s recalibrated strategy.
The post GM stock surges over 9% as automaker lifts profit forecast on lower tariff impact appeared first on Invezz