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 jumped 8.8% for the day, hitting an all-time closing high of $86.38.
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.
“[Q4 results] turns into the profitability that drives the cash flow engine. That allows us to continue to allocate capital in a way that’s friendly to shareholders,” GM CFO Paul Jacobson said in an interview with Yahoo Finance.
Jacobson added, “We’re still one of the most valuable stocks out there in terms of free cash flow yield; we still have a double-digit free cash flow yield. We feel like the stock is undervalued.”
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.”
“So with the changing regulatory environment, we see a much slower path to EV adoption, but we do see a path,” Jacobson said. “So what this is allowing us to do is to continue to drive cost savings and improvements into the vehicle profitability.”
Jacobson said GM sees EV sales at around 5%-7% adoption, down slightly to where the industry was headed, most likely leading to less than 100K GM EV sales in the US this year.
Earlier 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.
