General Motors lifts forecast as tariff outlook improves, shares surge 8%

Core Viewpoint - General Motors has raised its financial outlook for the year while slightly reducing the expected impact from tariffs, amidst a challenging electric vehicle market [1][2]. Financial Outlook - The company now anticipates its annual adjusted core profit to be between $12.0 billion and $13.0 billion, an increase from the previous estimate of $10.0 billion to $12.5 billion [2]. - The updated impact of tariffs on GM's bottom line is now projected to be between $3.5 billion and $4.5 billion, down from the earlier estimate of $4 billion to $5 billion [2]. Market Reaction - Shares of General Motors rose approximately 8% in premarket trading, positively influencing shares of Ford and Stellantis, which increased nearly 2% each [3]. Earnings Performance - GM's quarterly adjusted earnings per share fell to $2.80, surpassing LSEG analysts' expectations of $2.31 [4]. - The company incurred a $1.6 billion charge related to changes in its electric vehicle strategy, and revenue for the quarter ended September slightly decreased to $48.6 billion compared to the previous year [4][5]. Sales and Market Trends - U.S. car sales remained robust, increasing by 6% in the third quarter despite tariff uncertainties [5]. - American consumers have continued to choose more expensive models and added features, even as automakers have largely refrained from raising sticker prices to counteract tariff costs [5]. Tariff Relief - GM plans to mitigate 35% of its anticipated tariff impact, with relief expected for U.S. automakers following a new order from President Trump that expands credits for U.S. auto production [6][7]. - The MSRP offset program is anticipated to enhance the competitiveness of U.S.-produced vehicles over the next five years [7].