General Motors closed the fourth quarter with a result that exceeded expectations.
The Detroit automaker beat Wall Street earnings estimates, increased shareholder payouts and issued a forecast that points to another solid year.
At the same time, GM's results highlighted the costs associated with scaling back its electric vehicle ambitions and restructuring its China operations, resulting in billions of dollars in total special charges.
Exceeded profits offset weaker sales
GM meldete The company reported adjusted earnings per share of USD 2.51 for the fourth quarter, well above analysts' expectations of USD 2.20 (according to LSEG data).
Sales amounted to USD 45.29 billion, slightly below the consensus forecast of USD 45.8 billion.
While the revenue miss highlighted the continued pressure on the global automotive market, the profit beat signaled tighter cost control and more disciplined execution.
On an adjusted basis, the car manufacturer achieved earnings before interest and taxes of 2.8 billion US dollars in the quarter.
However, overall results were impacted by significant special items that pushed GM into a net loss despite the improved underlying business performance.
Decline in electric vehicles leads to strong charging activity
GM reported a net loss attributable to shareholders of $3.3 billion in the fourth quarter due to special charges totaling more than $7.2 billion.
These were largely due to the company's decision to withdraw from parts of its electric vehicle strategy and ongoing restructuring efforts in China.
Earlier this month, GM had already announced 7.1 billion dollars in charges.
Other items included $357 million related to OnStar and airbag litigation, $5 million related to the recent headquarters move and $133 million related to the discontinued Cruise robotaxi business.
The company said it continues to review its product portfolio after taking billions of dollars in write-downs related to all-electric vehicles, indicating a more cautious and flexible approach going forward.
Forecasts point to a stable performance.
Despite the quarterly loss, GM's outlook for the full year suggested confidence in the company's earnings power once restructuring costs ease.
For 2026, the automaker forecast net income attributable to shareholders of between $10.3 billion and $11.7 billion.
The company also forecast adjusted EBIT of USD 13 to 15 billion and earnings per share in the range of USD 11 to 13.
The adjusted EPS target is broadly in line with analyst expectations of $11.73 per share, based on the LSEG consensus.
GM said the guidance assumes spending between $10 billion and $12 billion, reflecting continued investment while maintaining tighter capital discipline.
For 2025, the company reported net income attributable to shareholders of $2.7 billion, or $3.27 per share.
Adjusted EBIT reached USD 12.7 billion, equivalent to USD 10.60 per share, while adjusted automotive free cash flow totaled USD 10.6 billion.
The Board of Directors also approved a new $6 billion share buyback program and increased the quarterly common stock dividend by 3 cents to 18 cents per share, an increase of 20%.
The share buyback is part of GM's efforts to reduce the number of outstanding shares. At the end of last year, the automaker's shares outstanding totaled 904 million, compared with 995 million at the end of the previous year and 1.2 billion at the end of 2023.
Management sees reducing the share base as a way to increase earnings per share and shareholder value.