The GM logo is seen on the facade of General Motors headquarters in Detroit on March 16, 2021.
Rebecca Cook | Reuters
DETROIT — General engines Chief Financial Officer Paul Jacobson said Tuesday that the company expects next year’s earnings to be higher than 2025, which was much better than Wall Street expectations.
Investors were hoping to hear feedback on 2026 guidance as the automaker reported third-quarter results that included raising 2025 guidance and beating Wall Street expectations.
“By 2026, we have several levers to continue our current momentum, in particular progress in terms of [electric vehicle] “Losses, warranty costs, tariff offsets, regulatory requirements and fixed costs,” Jacobson said. “As a result, we expect next year to be even better than 2025.”
Shares of the company rose more than 15% on Tuesday. The stock closed Monday at $58 per share.
Jacobson also said the automaker would continue to buy back shares, something the company has been aggressive about in recent years. At the end of the third quarter, GM’s shares outstanding stood at 954 million, down 15% from a year earlier.
“We’re going to continue to just focus on executing the business and executing the plan, and that’s worked very well for us and we expect that to be the case in 2026,” Jacobson said.
GM stocks in 2025.
Jacobson and Mary Barra, GM’s CEO, said the company’s top priority was to return adjusted profit margins in North America — its core market — to between 8 and 10 percent, but did not give a time frame for achieving that goal. The margin was 6.2% in the third quarter.
GM’s updated 2025 guidance includes adjusted earnings before interest and taxes of $12 billion to $13 billion, or adjusted EPS of $9.75 to $10.50, up $10 billion to $12.5 billion, or adjusted EPS of $8.25 billion to $10 billion, and automotive adjusted free cash flow of $10 billion to $12.5 billion. $11 billion, up from $7.5 billion to $10 billion.
“This comment is encouraging and consistent with our emerging view that automakers could deliver positive messages beyond 2025,” Itay Michaeli, an analyst at TD Cowen, said in a note to investors on 2026 on Tuesday.
RBC Capital Markets analyst Tom Narayan said he expects analyst consensus for 2026 to “increase significantly” following the third-quarter results and forecast adjustment.
Citi’s Michael Ward said recent results and guidance indicate a larger cultural shift for GM: “In the past, there was talk that it was difficult to turn the big GM ship around too quickly. Given the changing landscape, GM has found a way to turn it around much faster than in the past.
—CNBC Michael Bloom contributed to this report.
Correction: At the end of the third quarter, GM’s shares outstanding were 954 million. An earlier version misinterpreted the character.