General Motors Company (NYSE: GM) opened Tuesday with a robust quarterly earnings beat, complemented by enhancements in its shareholder return initiatives. The automaker lifted its quarterly dividend and greenlit a fresh $6 billion share repurchase scheme. These developments occurred alongside a tempered forward-looking earnings forecast and a reassessment of its electric vehicle (EV) strategy, reflecting evolving market conditions and regulatory frameworks. Additionally, media reports have surfaced suggesting potential collaboration with Ford Motor Co. (NYSE: F) in negotiations to stabilize First Brands Group, a supplier currently facing bankruptcy.
Fourth-Quarter Financial Performance
In the fourth quarter, General Motors posted an adjusted earnings per share (EPS) of $2.51, marking a significant 30.4% increase year over year. This figure surpassed analysts’ consensus estimates of $2.20, signifying a strong operational performance. Nevertheless, the company’s quarterly revenues reached $45.287 billion, narrowly missing the Street's expectation of $45.804 billion.
The adjusted Earnings Before Interest and Taxes (EBIT) experienced a substantial uplift, climbing 13.3% to $2.843 billion. Despite this growth, EBIT margins decreased to 7.3% from 6.2% in the comparable period last year. The firm’s liquidity position remained sound with cash and cash equivalents totaling $15.062 billion at the quarter’s end. Inventory levels were reported at $14.472 billion.
Mary Barra, General Motors’ Chair and Chief Executive Officer, highlighted the company’s consistent ability to generate robust cash flows, attributing success to the strength of its brand portfolio, vehicle lineup, technological services, and disciplined operations. Barra emphasized that these factors have enabled GM to pursue a balanced capital allocation strategy encompassing business investments, workforce development, balance sheet strength, and shareholder capital returns.
However, the quarter’s net income declined by over $7.2 billion, significantly impacted by special charges connected primarily to the realignment of EV production capacity and related investment recalibrations. These adjustments respond to anticipated reductions in consumer demand for EVs and shifts in U.S. governmental policies, including the cessation of consumer incentives and relaxed emissions regulations.
Enhanced Shareholder Returns
Coinciding with quarterly earnings dissemination, General Motors’ Board of Directors approved a 3-cent increase in the quarterly dividend, raising the payout to 18 cents per share. This dividend will be disbursed to shareholders registered on March 6, 2026, with payment scheduled for March 19, 2026.
In tandem, the Board authorized a new $6 billion share repurchase program. Share count has been actively managed downward, decreasing from 1.2 billion outstanding shares at the end of 2023 to 995 million shares by the close of 2024, further reduced to 904 million shares as of December 31, 2025.
Potential Collaboration with Ford Motor Co.
Emerging reports indicate that General Motors and Ford Motor Co. are nearing an agreement to financially support First Brands Group, a key auto parts supplier currently facing bankruptcy. The prospective arrangement involves both automakers providing advance payments for components scheduled for future delivery, thereby injecting immediate liquidity to sustain First Brands' operational continuity.
According to these accounts, talks are in final stages but the conclusion of a definitive deal remains uncertain, with the Financial Times reporting on the situation on Tuesday.
Outlook and Market Reaction
For fiscal year 2026, General Motors projects adjusted EPS in the range of $9.75 to $10.50, falling short of the Wall Street consensus forecast of $11.73. The company’s guidance for GAAP earnings per share spans $8.30 to $9.05, also below the analyst consensus of $10.04.
Following these announcements, GM shares experienced a premarket increase of 3.87%, trading at $82.50, edging closer to their 52-week peak of $85.18, per Benzinga Pro data.
"For several years now, GM’s strong brands and winning vehicles, as well as our technology-driven services and operating discipline, have delivered consistently strong cash generation," stated CEO Mary Barra. "This has allowed us to execute all phases of our capital allocation strategy, from investing in the business and our people, to maintaining a strong balance sheet and returning capital to shareholders."
| Metric | Q4 2025 | Year-Over-Year Change | Consensus Estimate |
|---|---|---|---|
| Adjusted EPS | $2.51 | +30.4% | $2.20 |
| Revenue | $45.287B | (Missed) | $45.804B |
| Adjusted EBIT | $2.843B | +13.3% | NA |
| EBIT Margin | 7.3% | Down from 6.2% | NA |
| Cash & Equivalents | $15.062B | NA | NA |
| Inventories | $14.472B | NA | NA |
Key Points
- GM delivered a quarterly earnings surprise with adjusted EPS rising 30.4% and beating consensus by 31 cents, despite slightly missing revenue expectations.
- The firm announced a dividend increase of three cents per share and a fresh $6 billion share repurchase plan, continuing aggressive shareholder return policies.
- Strategic realignment in EV production led to significant special charges and a downward revision of earnings guidance for fiscal 2026.
- GM and Ford are reportedly finalizing a deal to provide financial relief to the bankrupt supplier First Brands Group, suggesting cross-industry cooperation.
Risks and Uncertainties
- GM’s adjusted and GAAP earnings forecasts for 2026 fall below consensus estimates, potentially indicating caution about market or operational headwinds.
- The decline in net income due to special EV-related charges reflects risk associated with shifts in consumer demand and regulatory policies.
- The proposed partnership with Ford to support First Brands Group remains uncertain, with no guaranteed conclusion of the agreement.
- Changes in U.S. EV incentives and emissions regulations could materially affect GM’s strategic positioning and financial performance moving forward.