GM Boosts Profit Outlook on 'Resilient' Consumer Demand
By Reuters | 21 Jul, 2026

General Motors reported a 30% increase in second-quarter core profit on profitable SUV and truck sales despite higher gas prices, persistent inflation and slowing job growth.

General Motors lifted its full-year earnings outlook on Tuesday for the second time after reporting a 30% increase in second-quarter core profit on the back of profitable SUV and truck sales.

The Detroit automaker said it easily surpassed analysts' profit estimates despite a choppy economic backdrop as consumers grappled with higher gas prices, persistent inflation and slowing job growth during the quarter.

Strong profit in its home market of North America, which is also its biggest, was driven by solid pricing.

GM shares rose about 1% in premarket trading.

GM’s customers continue to spend up on pricey pickup trucks and large SUVs, such as the Cadillac Escalade, despite higher gas prices. The average GM vehicle in the U.S. sold for about $52,000 during the quarter, up slightly from a year earlier.

That has helped the company to offset pressures from higher commodity and trade-related costs, including added expenses related to relocating some vehicle production to the U.S. to avoid the Trump administration’s tariffs.

”We’ve managed to shrug off some of that uncertainty,” GM CFO Paul Jacobson told CNBC on Tuesday morning, saying that the company’s customers have “been very resilient.”

The company's quarterly earnings before interest and tax (EBIT) rose to $3.9 billion from roughly $3 billion a year earlier. On an adjusted basis, it earned $3.57 per share, topping analyst expectations of $3.20, according to LSEG data.

GM raised its 2026 profit outlook by $500 million to a range of $14 billion to $16 billion. In the first quarter, GM increased its outlook by $500 million, the amount it expects to recover from refunds tied to a U.S. Supreme Court ruling that struck ​down some of the Trump administration's tariffs.

The automaker benefited from stronger sales of gas-powered cars and a sharp drop in sales of electric vehicles, which have been money losers historically. President Donald Trump's administration last year eased regulations on vehicle fuel efficiency and emissions, allowing companies to sell more combustion-engine cars.

Despite the stronger-than-expected quarter, the largest U.S. carmaker by sales said its results would continue to be weighed down by tariff pressures and rising supply costs.

GM maintained an earlier forecast of a $2.5 billion to $3.5 billion hit to its bottom line from tariffs. It said inflation in raw material, computer chip and logistics costs should cut earnings by $1.5 billion to $2 billion this year.

The relocation of factory work to the U.S. from overseas, plus higher software expenses, led to between $1 billion and $1.5 billion of additional costs, it said.

In a letter to shareholders, CEO Mary Barra said that the company plans to bring more factory work to the U.S. to reduce its tariff exposure.

Quarterly net income dropped 31% from a year earlier to $1.3 billion, mostly because of about $2.3 billion in costs related to restructuring of electric vehicle factory operations. Revenue rose 2% to $48 billion.

In North America, the profit margin improved to 8.6% from 6.1% a year earlier, despite a 4% decline in quarterly sales.

In China, where GM is restructuring, it reported equity income of $83 million, up from $71 million a year earlier. Its international business, excluding China, posted a 7% drop in core profit to $190 million.

(Reporting by Kalea HallEditing by Alexander Smith, David Goodman and Tomasz Janowski)