General Motors Shares Fall 6.8% as Cost Warning Overshadows Q3 Beat

General Motors (NYSE: GM), the Detroit carmaker, saw its shares fall 6.8% yesterday despite beating third-quarter forecasts and raising its cash-flow outlook. The market focused instead on a full-year earnings guidance midpoint below expectations and on management’s warning that costs are rising.

GM closed at $77.09 yesterday, down 6.84% from $82.75 on Monday, on volume of 24.66m shares against a typical 5m to 8m. The close sits well below its highest close in the past three months, $90.30 on the 28th of July.

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The quarter itself was strong. Adjusted earnings per share came in at $3.70 against $3.63 expected, and revenue of $50.02bn beat the $48.7bn consensus, the average analyst forecast compiled by LSEG. North America adjusted EBIT, a measure of operating profit, rose 43.4%.

The guidance was more mixed. GM narrowed its full-year ranges against its previous guidance.

The cash-flow range moved higher at both ends, the EPS range’s lower end rose while its top end fell, and the EBIT midpoint stays at $15.0bn. The new EPS midpoint of $13.25 sits below the $13.41 LSEG consensus.

Barra, GM’s chief executive, told analysts on the earnings call that the outlook had become harder, with 2027 still expected to be strong.

While the path forward is more challenging, we continue to believe that 2027 will be another strong year and better than 2026, assuming customer demand remains strong and commodity, logistics and other recent cost pressures moderate.

Barra, GM chief executive

Finance chief Paul Jacobson said that the fourth quarter will be down sequentially, meaning lower than the third. GM expects commodity inflation of about $2bn, the high end of the previous range.

GM also announced a $20bn multi-year share buyback with no expiry date. Barra said the aim was to signal that the company believes it is undervalued. The fall looked driven mainly by the narrower outlook missing the consensus midpoint and by concerns over costs and tone.