General Motors shares fell more than 5% in morning trading on Oct. 20 after the company reported strong third-quarter earnings but warned of intensifying cost pressures. The decline came despite GM’s announcement of a $20 billion stock-repurchase program, following the completion of a previous $6 billion buyback authorization.
GM reported third-quarter revenue of $50 billion, a 3% increase from the prior year, alongside a 22% rise in adjusted earnings before interest and taxes to $4.1 billion. The company attributed its financial performance to strong sales of high-margin pickup trucks and SUVs. However, CEO Mary Barra cautioned that external headwinds are intensifying, particularly in logistics, commodities, and memory costs.
During an earnings call, Barra highlighted $2 billion in cost headwinds for 2025, with $700 million incurred in the third quarter and $1.3 billion year-to-date. She noted that copper prices are at record levels and hot-rolled coil (HRC) steel prices are at four-year highs, with spot prices rising 10% to 15% since July and 50% above last year’s average. Barra also cited disruptions linked to the Middle East conflict as a factor in transportation challenges.
Wall Street had anticipated GM’s results, with LSEG data showing expectations for flat revenue compared to a year earlier and a 30% increase in adjusted earnings per share. Analysts from JPMorgan suggested that while third-quarter results were expected to meet or slightly exceed estimates, investor focus would likely shift to 2027 guidance revisions amid concerns about slowing sales and rising commodity costs.
GM had previously raised its 2026 forecast in its second-quarter report, projecting adjusted earnings before interest and taxes of $14 billion to $16 billion and adjusted earnings per share of $12 to $14. The company also forecast adjusted automotive free cash flow of $9.5 billion to $11.5 billion. Investors were monitoring updates on the launch of redesigned full-size pickup trucks, warranty improvements, and growth in GM’s software and service operations.
The earnings report follows a period of volatility for GM, with shares declining despite strong operational performance. The company’s decision to approve a $20 billion buyback program signals confidence in its long-term financial position, even as cost pressures weigh on profitability.