GM reports 22% rise in core profit, approves $20 billion buyback; shares fall on cost outlook

General Motors reported third-quarter revenue of US$50.0 billion and net income of US$3.3 billion on Tuesday 20 October, according to its results release.

Adjusted earnings before interest and tax rose 22% from a year earlier to US$4.1 billion, or US$3.70 a share, above analysts’ average estimate of US$3.63, according to LSEG data cited by Reuters.

GM narrowed its full-year forecast for adjusted earnings per share to between US$12.75 and US$13.75. Reuters said the midpoint was below the analysts’ average estimate of US$13.41. The board approved a new US$20 billion share buyback with no expiry date.

The company said commodity inflation, including logistics and computer chips, would total about US$2 billion this year, and that gross tariff costs would be at the lower end of its US$2.5 billion to US$3.5 billion range, Reuters reported. Chief financial officer Paul Jacobson said steel, aluminium and logistics costs had risen sharply over the past two months. “The consumer has held up remarkably well,” he told analysts.

GM said fourth-quarter results would be affected by fewer truck deliveries ahead of redesigned Chevrolet Silverado and GMC Sierra models.

GM shares were down 6.9% at midday in New York, Reuters reported. CFRA analyst Garrett Nelson attributed the fall to the guidance midpoint being below consensus.