General Motors (GM) continued its strong run of quarterly performances with fourth quarter earnings that topped estimates, as it upped its dividend and instituted a new $6 billion stock buyback plan.
For the quarter, GM reported revenue of $45.29 billion compared with the $45.37 billion estimated, a drop of 5.1% compared with last year. The automaker posted Q4 adjusted earnings per share (EPS) of $2.51, vs. $2.28 expected, on adjusted earnings before interest and taxes (EBIT) of $2.84 billion vs. $2.77 billion estimated.
For 2026, GM projects the following:
- Adjusted EBIT in a range of $13 billion to $15 billion
- Adjusted automotive free cash flow of $9 billion to $11 billion
- Adjusted EPS (diluted) of $11.00 to $13.00
- GM shares rose over 4% in premarket trading after the earnings release.
"We expect the US new vehicle market will continue to be resilient, and with our compelling vehicles, technology-driven services, and operating discipline, 2026 should be an even better year for GM," CEO Mary Barra said in a statement.
"We expect our full year EBIT-adjusted margins in North America will be back in the 8%-10% margin range," she added.
Due to higher expectations for the year, GM's board upped its quarterly dividend by $0.03 to a new rate of $0.18 per share. It also declared a new $6 billion share repurchase authorization.
For 2025, GM reported the following, compared with its guidance:
- Adjusted EBIT in a range of $12.7 billion vs. $12 billion to $13 billion
- Adjusted automotive free cash flow of $10.6 billion vs. $10 billion to $11 billion
- Adjusted EPS (diluted) of $10.60 vs. $9.75 to $10.50
"We are operating in a US regulatory and policy environment that is increasingly aligned with customer demand. As a result, we continue to onshore more production to meet strong customer demand for our vehicles," Barra said.
Last quarter, GM CEO Mary Barra said the MSRP tariff offsets announced by the White House last summer allowed it to boost profit guidance for the year. GM said its full-year tariff exposure came in at $3.1 billion, compared with the $3.5 billion to $4.5 billion it projected earlier.
Headwinds for 2026 include an additional $3 billion to $4 billion in tariff costs, GM said. It also faces commodity and FX headwinds ($1 billion to $1.5 billion), alongside onshoring and other costs (approximately $1 billion to $1.5 billion).
Noteworthy is GM claiming EV unit losses would improve by $1 billion to $1.5 billion. The company said it will recognize regulatory benefits of $550 million to $750 million, credited to savings from not having to purchase emissions credits.
Earlier in January, GM took an additional $6 billion charge to its electric vehicle business, citing softer-than-expected demand for EVs and the loss of the federal EV tax credit at the end of Q3 2025.
GM's charge taken this month comes on top of the $1.6 billion it took in Q3 following a "reassessment" of its EV business, giving it a total EV write-down of $6.6 billion. GM said it expects to "recognize material, but significantly smaller, cash and non-cash EV-related charges in 2026."
Also this month, GM said Q4 US sales slipped 6.9% from a year ago to just over 703,000 but were up 5.5% in 2025 to 2.85 million vehicles, making it the top-selling automaker in the US.
GM said full-size pickup sales were up for the sixth straight year, the best in 20 years. Sales of full-size SUVs like the Tahoe, Suburban, and Yukon also propelled GM to a category win in the segment for the fifth straight year.
However, GM said EV sales in Q4 fell a whopping 43% to just over 25,000 units, weighing on results. GM said a "pull ahead" in EV sales in Q3 before the expiration of the federal EV tax credit hurt Q4 results.