General Motors Shares Plunge 6% Despite $20 Billion Buyback Announcement And Earnings Beat

General Motors shares are plunging more than 6% in premarket trading Tuesday, despite the automaker announcing a massive new $20 billion share repurchase program and reporting quarterly earnings that came in ahead of Wall Street expectations, according to Bloomberg News. 

The selling comes as GM continues to grapple with a weakening U.S. auto market, where higher financing costs and pressure on household budgets have made it increasingly difficult to sell lower-priced vehicles. Demand for the company’s more expensive trucks and SUVs has held up considerably better, allowing GM to preserve profitability even as overall sales volumes come under pressure.

Bloomberg/Financial Post reports that for the third quarter, GM generated approximately $50 billion in revenue and $4.1 billion in adjusted operating profit, narrowly beating analyst expectations. Adjusted earnings of $3.70 per share also exceeded the $3.56 consensus estimate. Perhaps more importantly, automotive free cash flow jumped 40% to $5.9 billion.

That cash generation is helping fund an increasingly aggressive effort to return money to shareholders. GM’s latest $20 billion repurchase authorization follows a $6 billion program announced earlier this year and approximately $29.5 billion in buybacks completed since 2023. The newest authorization is expected to be used over several years.

Management also tightened its 2026 earnings forecast, now expecting adjusted operating profit between $14.5 billion and $15.5 billion, versus its previous projection of $14 billion to $16 billion. The midpoint of the guidance remains unchanged.

Looking ahead, GM is putting additional emphasis on its bread-and-butter pickup business, with redesigned Chevrolet Silverado and GMC Sierra trucks expected later this year. The company also plans to increase output of higher-end models equipped with V-8 engines, betting that wealthier consumers will continue paying a premium for larger vehicles.

The approach marks a notable change from GM’s previous enthusiasm for electric vehicles and autonomous driving, both of which have resulted in expensive setbacks. CEO Mary Barra has increasingly redirected attention toward established profit centers, while pursuing more targeted opportunities in vehicle software, advanced driver assistance and even defense-related manufacturing.

GM’s overseas operations, meanwhile, continue to struggle. Quarterly profit from China fell 60% from a year earlier to just $32 million.

The broader auto industry has undergone a significant reassessment over the past two years. After spending much of the early 2020s promising an accelerated transition to electric vehicles, several major manufacturers have scaled back EV investments, delayed launches and absorbed substantial losses as consumer adoption failed to match earlier expectations.

At the same time, persistently expensive vehicles, elevated interest rates and increasingly stretched consumers have complicated the outlook for traditional auto sales. The result is an industry increasingly focused on protecting margins, generating cash and selling the vehicles customers are actually willing to buy, rather than pursuing the ambitious growth narratives that dominated the sector just a few years ago.