General Motors raises FY26 outlook on demand for high-margin trucks, SUVs

Fueled by continued strong North American demand for pickups and SUVs, General Motors (GM) reported better-than-expected second-quarter results and raised its full-year outlook, citing manufacturing efficiencies, growth in its software and services business, and upcoming vehicle launches.

Shares have surrendered early gains, however, as the automaker again lowered its expectations for net income attributable to stockholders to a range of $8.4B and $9.8B in FY26, down from a previously lowered range of $9.9B and $11.4B due to ongoing EV-related costs.

The remaining guidance for the year continued to support GM’s (GM) expectations for “trends to continue to strengthen our performance in 2027 and beyond” thanks to “multiple engines of margin expansion and growth while maintaining capital discipline,” GM CEO Mary Barra said in a letter to shareholders.

GM raised its FY26 guidance to reflect better-than-expected Q2 results and the ability to offset higher material costs as well as tariff and geopolitical headwinds. The company now sees adjusted EBIT between $14.0B and $16.0B and adjusted EPS of $12 to $14 (versus $12.79 estimates). This compares to previous guidance of $13.5B to $15.5B in adjusted EBIT and EPS of $11.50 to $13.50. 

“In our view, GM’s ability to generate an EBIT margin from [North American] operations of 8%-10% and free cash flow of over $9B in 2026 despite ongoing tariff and BEV headwinds are positives supporting our Buy rating,” Citi Research analyst Michael Ward said regarding the most recent results.

For the reported quarter, GM (GM) earned a profit of $3.57 per share on $48.03B in sales. This compares to estimates of $3.18 and $47.09, respectively. The 41% improvement in profitability underscores the pricing power of its high-margin trucks as well as lower tariff costs.

While net income margin was compressed by 325 basis points, adjusted EBIT margin widened by 281 basis points to 8.2% thanks to lower warranty costs and EV losses along with increased operating efficiencies.