General Motors (GM) reported another solid quarter as a better-than-expected profit, a hike in the dividend and share buyback offset a 5% decline in sales and a significant write-off from its electric vehicle business.
Shares are gaining ground in premarket trading, currently trading nearly 4% higher into Tuesday’s opening bell.
While the company took a $7.2B hit to net income tied to losses in its EV division and decision to realign production, GM (GM) earned an adjusted profit of $2.51 per share, up 31% from a year ago and 25 cents above expectations. The charges to the company’s bottom-line resulted in an unadjusted net income margin of (7.3%) but 6.3% on an adjusted basis, up 100 basis points from the same quarter last year.
Total sales of $45.3B were down 5.1% from a year earlier and missed Wall Street’s expectations by $750M.
The automaker also issued upbeat profit guidance for the year, expecting adjusted earnings to be between $11.00 and $13.00 per share with a midpoint of $12.00 per share that exceeds $11.83 expectations. Additionally, operating cash flow generated by its automotive business is expected to be between $19B and $23B, up from $18.7B in 2025.
“We expect the U.S. 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. We expect our full year EBIT-adjusted margins in North America will be back in the 8-10% margin range.” GM CEO Mary Barra said in a letter to shareholders, adding that annual U.S. production is expected to rise to 2M units over the next few years.
With profits up and cash flow improving, General Motors (GM) will pay a higher quarterly dividend and buy back $6B in shares through a new repurchase authorization. On March 19, GM (GM) will pay shareholders a dividend of $0.18 per share, up 3 cents from the previous quarter.