General Motors posted on Tuesday a 22 per cent rise in first-quarter core profit and lifted its full-year earnings forecast, buoyed by a resilient U.S. car market and an expected tariff refund.
The largest U.S. automaker by sales comfortably beat analysts’ profit estimates while navigating a fast-changing geopolitical and regulatory backdrop that is reshaping the industry.
U.S. tariffs and higher energy costs linked to the Iran war are weighing on results, even as looser U.S. pollution and fuel-economy rules introduced last year under President Trump are lifting margins.
Pickup-truck sales, a key profit driver, remained strong despite higher gas prices.
GM warned, though, that inflation driven by the war would continue to pressure the business.
“The number one thing we’re watching is what happens with the Iranian conflict,” CEO Mary Barra said, pointing to rising commodity and logistics costs. The company also said it diverted planned shipments of 7,500 SUVs from the Middle East because of the conflict.
Core profit beat
GM reported earnings before interest and taxes of US$4.3 billion, or US$3.70 per share, which beat analysts’ estimate of US$2.62, according to LSEG data. Shares fell around two per cent in morning trading.
The Detroit automaker raised its 2026 profit outlook by US$500 million, matching 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. It now expects full-year core profit of US$13.5 billion to US$15.5 billion.
It still sees U.S. tariffs cutting US$2.5 billion to US$3.5 billion from profits this year, revised down from an earlier estimate of US$3 billion to US$4 billion because of the expected refund.
GM’s higher profit outlook comes despite rising costs. It now expects inflation in raw materials, computer chips and logistics to cut earnings by US$1.5 billion to US$2 billion this year, about US$500 million more than it estimated late last year.
Lower sales but higher margins
Quarterly net income fell six per cent from a year earlier to US$2.6 billion, mostly due to a US$1.1 billion charge to settle supplier claims for slowing electric-vehicle programs. Revenue of US$43.6 billion was down less than one per cent.
American consumers have continued buying cars despite economic uncertainty from tariffs, higher gas prices and a shaky job market.
“We haven’t seen any material changes to demand or mix thus far,” CFO Paul Jacobson said on an earnings call.
JPMorgan analyst Ryan Brinkman said GM deserves credit for raising its profit forecast despite “significant uncertainty and volatility.”
In North America, GM’s biggest money maker, its profit margin improved to 10.1 per cent from 8.8 per cent a year earlier, despite lower vehicle shipments to dealers and a 10 per cent decline in sales in the first quarter.
The sales decline partly reflected a tough comparison with the first quarter of 2025, when U.S. buyers snapped up new vehicles ahead of tariff-related price hikes.
Pickup-truck sales remained strong even as U.S. gasoline prices surged above US$4 per gallon in March. Jacobson told CNBC that dealership traffic stayed steady in March and April.
GM said savings from eased U.S. tailpipe emissions rules, lower warranty expenses and stronger pricing helped offset weaker sales. Its average U.S. vehicle selling price rose about three per cent to US$52,000 in the quarter.
Pulling back on its EV business also lifted results by several hundred million dollars, as those vehicles remain loss-making. GM expects a US$1 billion boost this year from reducing EV losses.
In China, where GM is restructuring, the automaker reported equity income of US$165 million, versus US$45 million a year ago. Its international business excluding China posted core profit of US$123 million, up from US$30 million.
Like many rivals, GM has cut back EV production amid weaker demand following pro-fossil-fuel U.S. policies introduced last year. EV sales fell 43 per cent in the final three months of last year.
In addition to the first-quarter charge, GM booked US$7.6 billion in writedowns on its EV programs last year.
---
Reporting by Kalea Hall in Detroit and Nathan Gomes in Bangalore. Editing by Mike Colias and Mark Potter
