Strong profit in its home market of North America, which is also its biggest, was driven by solid pricing
Published Tue, Jul 21, 2026 · 09:47 PM
[DETROIT] General Motors lifted its full-year earnings outlook on Tuesday (Jul 21) for the second time after reporting a 30 per cent increase in second-quarter core profit on the back of profitable SUV and truck sales.
The Detroit automaker said it easily surpassed analysts’ profit estimates despite a choppy economic backdrop as consumers grappled with higher gas prices, persistent inflation and slowing job growth during the quarter.
Strong profit in its home market of North America, which is also its biggest, was driven by solid pricing.
GM’s customers continue to spend up on pricey pickup trucks and large SUVs, such as the Cadillac Escalade, despite higher gas prices. The average GM vehicle in the US sold for about US$52,000 during the quarter, up slightly from a year earlier.
That has helped the company to offset pressures from higher commodity and trade-related costs, including added expenses related to relocating some vehicle production to the US to avoid the Trump administration’s tariffs. “We’ve managed to shrug off some of that uncertainty,” GM CFO Paul Jacobson told CNBC on Tuesday morning, saying that the company’s customers have “been very resilient.”
The company’s quarterly earnings before interest and tax (EBIT) rose to US$3.9 billion from roughly US$3 billion a year earlier. On an adjusted basis, it earned US$3.57 per share, topping analyst expectations of US$3.20, according to LSEG data.
GM raised its 2026 profit outlook by US$500 million to a range of US$14 billion to US$16 billion. In the first quarter, GM increased its outlook by US$500 million, the amount it expects to recover from refunds tied to a US Supreme Court ruling that struck down some of the Trump administration’s tariffs.
The automaker benefited from stronger sales of gas-powered cars and a sharp drop in sales of electric vehicles, which have been money losers historically.
President Donald Trump’s administration last year eased regulations on vehicle fuel efficiency and emissions, allowing companies to sell more combustion-engine cars. Despite the stronger-than-expected quarter, the largest US carmaker by sales said its results would continue to be weighed down by tariff pressures and rising supply costs.
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GM maintained an earlier forecast of a US$2.5 billion to US$3.5 billion hit to its bottom line from tariffs. It said inflation in raw material, computer chip and logistics costs should cut earnings by US$1.5 billion to US$2 billion this year.
The relocation of factory work to the US from overseas, plus higher software expenses, led to between US$1 billion and US$1.5 billion of additional costs, it said.
In a letter to shareholders, CEO Mary Barra said that the company plans to bring more factory work to the US to reduce its tariff exposure. Quarterly net income dropped 31 per cent from a year earlier to US$1.3 billion, mostly because of about US$2.3 billion in costs related to restructuring of electric vehicle factory operations. Revenue rose 2 per cent to US$48 billion.
In North America, the profit margin improved to 8.6 per cent from 6.1 per cent a year earlier, despite a 4 per cent decline in quarterly sales. In China, where GM is restructuring, it reported equity income of US$83 million, up from US$71 million a year earlier. Its international business, excluding China, posted a 7 per cent drop in core profit to US$190 million. REUTERS
