Dubai Telegraph - General Motors lifts 2026 outlook despite hit from electric retreat

The big US automaker reported $1.3 billion in profits, down 31 percent from the year-ago period. Revenues rose almost two percent to $48 billion.

North American auto sales fell during the period, although strong pricing translated into higher profit margins.

The company said results in North America -- by far its biggest market -- were boosted by "record" sales of full-sized pickup trucks. Fleet sales were also strong, supported by robust demand from commercial and government customers.

But results were dented by $2.3 billion in costs related to GM's EV retreat following shifts in US environmental policy under President Donald Trump. GM also accounted for $177 million in China restructuring costs.

Chief Financial Officer Paul Jacobson said consumers have been "very resilient," with the company observing no shifts in vehicle preference due to higher gasoline prices resulting from the US-Iran war.

"I think it takes a much longer time period before we would see any impact," Jacobson told CNBC.

On Monday, US gasoline prices rose back above $4 a gallon, according to the American Automobile Association, reflecting renewed fighting in the Middle East.

GM maintained its full-year projection of between a $2.5 billion and $3.5 billion hit from US tariffs enacted by Trump. But GM CEO Mary Barra said in a letter to shareholders that the company is shifting more production back to the United States to reduce tariff exposure.

On Monday, Trump ordered new 50 percent tariffs on many Canadian goods, citing among other things, Canada's "discriminatory" levies on US items including cars.

A White House fact sheet said the new US tariffs will cover "products ranging from wine to hockey sticks to cement." The move comes as the two countries, along with Mexico, are negotiating a revised trade agreement among the neighboring states.

Jacobson described the trade accord as a priority, saying "we're confident that the governments will be able to work through it."

GM lifted its 2026 forecast for pre-tax operating earnings to a range of $14 billion to $16 billion, up a half billion from the prior level.

The projection "assumes no material escalation in the Middle East" and no significant jump in commodity costs, according to a slide.

GM said the increased 2026 profit outlook in part reflects "slightly better" dynamics in terms of commodity costs.

The company anticipates 2027 results to be "better" than this year's, due in part to increased supply of top-selling sport utility vehicles.

Shares of GM climbed 0.7 percent in pre-market trading.

Y.Al-Shehhi--DT