General Motors stock falls 9.6% in a week as 2026 earnings outlook narrows
Key Facts
General Motors stock fell 9.6% in the week ended October 23, its biggest weekly decline since November 2023, amid a broader selloff in auto shares, according to Bloomberg. The drop followed the company’s October 20 narrowing of its 2026 adjusted operating earnings and earnings-per-share outlook. The stock closed at $82.75 on October 19, then ended trading on October 23 at $75.92, according to EL7 data. On that Tuesday, the stock fell 6.8% in its worst session since July 2025. Chief Executive Mary Barra said the company was facing “clear external headwinds.”
General Motors lowered its 2026 adjusted operating earnings outlook range to $14.5–15.5 billion from $14–16 billion, and narrowed its adjusted diluted earnings-per-share range to $12.75–13.75 from $12–14. The company had raised its outlook in July for the second time during the year, lifting its operating earnings range from $13.5–15.5 billion to $14–16 billion and its per-share range from $11.50–13.50 to $12–14. October’s revision puts both the low and high ends of the operating earnings range above the range raised in July. The new earnings-per-share range also remains above the pre-July outlook. The revision follows two improvements to the company’s annual estimates during 2026.
The company said goods inflation, including logistics and DRAM memory costs, is expected to reach about $2 billion in 2026, compared with a previous estimate of $1.5–2 billion. It also expects total tariff costs to be at the low end of the $2.5–3.5 billion range. By contrast, General Motors expects warranty cost reductions to reach the high end of the $1.0–1.5 billion range. The company estimated regulatory benefits at about $500 million. These items combine elevated cost pressures with expected warranty and regulatory benefits in its estimates for the year.
Third-quarter results showed revenue of $50.0 billion, net income attributable to shareholders of $3.3 billion and adjusted operating earnings of $4.1 billion. Adjusted operating earnings rose 21.6% year over year, while adjusted diluted earnings per share was $3.70, compared with $2.80 in the same period a year earlier. In North America, adjusted operating profit was $3.592 billion, and its margin rose to 8.7% from 6.2% a year earlier. But the company’s deliveries fell 11% year over year during the quarter, which General Motors attributed mainly to lower electric-vehicle sales and discontinued models. It said cost efficiency, higher volume and product mix supported the results.
The stock’s decline coincided with broader market weakness on Friday, October 23, as the S&P 500 fell 0.5% and the Dow Jones fell 1.2%, according to the Associated Press. By contrast, Brent crude rose 3.1%, topping $116 a barrel, its highest level since June 2022. At the company level, General Motors approved a multiyear, $20 billion share repurchase authorization. It also announced a quarterly cash dividend of $0.18 per share, payable on December 17, 2026, to shareholders of record at the close of trading on December 4. These steps remain part of the company’s stated shareholder policy as the market reassesses its earnings outlook.
In her letter to shareholders, Barra said the company was working to sustain momentum despite mounting inflationary pressures. General Motors plans to complete the rollout of its 2027 Chevrolet Silverado and GMC Sierra light-duty trucks in the coming period. It also said it was on track to approach $7.5 billion in higher-margin deferred software and services revenue during 2026. The company includes these launches and services revenue in its upcoming agenda. The announced cash dividend is scheduled to be paid on December 17 to shareholders of record on December 4.