en.Wedoany.com Reported - General Motors (GM.N) raised its 2026 profit forecast again on July 21, as strong demand for high-priced pickup trucks and SUVs in the U.S. market drove a 30% year-over-year increase in second-quarter core profit. Despite headwinds such as rising oil prices, persistent inflation, and slowing job growth for consumers, the Detroit automaker's results easily beat analyst expectations.
General Motors' strong profit in the North American market benefited from stable pricing. The average selling price in the U.S. this quarter was approximately $52,000, slightly higher than the same period last year. Chief Financial Officer Paul Jacobson said customers have shown considerable resilience, and the company has partially moved past uncertainty. Evercore ISI analyst Chris McNally noted that despite challenges faced by some global automaker competitors, GM continues to demonstrate solid execution.
Quarterly earnings before interest and taxes rose to $3.9 billion from about $3 billion in the same period last year. According to LSEG data, adjusted earnings per share were $3.57, above the analyst estimate of $3.20. General Motors raised its 2026 profit outlook by $500 million to a range of $14 billion to $16 billion, marking the second increase of the same magnitude this year. One growth driver is its defense business, which the company expects to generate nearly $700 million in revenue this year and maintain an average growth rate of 30% over the next few years.
Strong demand from U.S. consumers helped the company offset rising commodity and trade-related costs. To avoid tariffs under the Trump administration, General Motors plans to shift some vehicle production to the United States. The company said it will begin producing the Chevrolet Equinox and Blazer in the U.S. in 2027; these models are currently manufactured in Mexico. Some truck production has already been moved to an assembly plant in Michigan. Relocating factories from overseas to the U.S., along with increased software spending, has resulted in additional costs of between $1 billion and $1.5 billion.
General Motors benefited from strong sales of gasoline-powered vehicles, while electric vehicle sales declined sharply. The company said EV losses will decrease by $1 billion to $1.5 billion this year. Since the second quarter of 2025, it has accumulated $10.9 billion in EV-related charges, including $2.3 billion in the current quarter. Jacobson said the company has now completed cash expenditures related to the EV contraction. The U.S. government's relaxation of vehicle fuel efficiency and emissions regulations has added $500 million to $750 million to the company's profit this year.
General Motors said results will continue to be weighed down by tariff pressures and rising supply costs. The company maintained its previous forecast that tariffs would impact its earnings by $2.5 billion to $3.5 billion. Inflation in raw materials, computer chips, and logistics costs is expected to reduce earnings by $1.5 billion to $2 billion this year. In North America, despite a 4% decline in quarterly sales, profit margins improved to 8.6% from 6.1% in the same period last year. In China, the company reported equity income of $83 million, up from $71 million a year earlier. Core profit from international operations outside China fell 7% to $190 million.
