General Motors saw its first quarter net income drop 5.7% to $2.6 billion due costs associated with a settlement with its electric vehicle supplier base. However, on an adjusted basis its earnings rose 21.9% to $4.3 billion.
Overall, the GM’s Q1 sales were down, but it rode industry-leading full-size pickup sales to a strong quarter.
The company revised its full-year earnings guidance as well, upping the range for its adjusted earnings forecast for 2026 by $500 million to $13.5 billion to $15.5 billion. The increase is the amount it expects to receive after the U.S. Supreme Court ruled against the Trump administration’s use of the International Emergency Economic Powers Act to raise certain tariffs.
Like a Rock
Overall, the company’s Q1 sales were down, but it rode industry-leading full-size pickup sales to a strong quarter, officials noted.
“We have solid momentum in our core operations: We maintained overall sales leadership in the U.S. and Canada. We led the U.S. industry in full-size pickup sales and share, with 42% of the market,” GM Chair and CEO Mary Barra wrote in a letter to shareholders.
The Detroit-based automaker’s revenue dropped slightly, 0.9 percent, to $43.6 billion while net income came in at $2.6 billion, after the company paid $1.1 billion to settle claims with its EV supplier base
The adjusted earnings per share (EPS) was $3.70, well above the $2.78 EPS reported for the same period last year. It was also well above what Wall Street analysts were expecting. Reuters reported analysts were predicting $2.62 per share, according to LSEG data.
More GM News
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- GM Slashes EV Production at Factory Zero as Sales Slide
Unhappy with the numbers
Investors have chewed on the numbers and appear to be displeased, as GM’s stock opened in the in the mid-$76 per share range after closing at $78.05 the previous day. The stock had made a small comeback into the middle $77 range in early morning trading. However, it’s took a tumble after that falling in the high $74 range in midmorning trading.
GM raised its full-year earnings guidance by $500 million.
GM’s business was led by its performance in North America, although overall Q1 sales were down, the company’s highly profitable full-size pickups led the charge to solid profits. The sales were surprisingly strong given the rise of gas prices past $4 per gallon, a result of the ongoing conflict with Iran.
This year’s first quarter was difficult for most automakers. Last year at this time, buyers were flocking to dealers looking to buy new vehicles before tariff-related price increases were expected to hit. However, Barra expressed optimism with shareholders.
“We are clearly operating in a very dynamic environment, which isn’t unusual for this industry,” she wrote in the shareholder letter. “That’s why we have had a multi-year focus to ensure we have the right products, the right team, and a strong balance sheet supported by healthy cash flows to achieve our long-term goals and consistently execute our capital allocation strategy.
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