GM Beats Earnings, Announces 20% Dividend Hike
General Motors reports Q4 EPS of $2.51 vs $2.27 expected. Company adds $6 billion buyback and raises quarterly dividend despite $3.3 billion net loss.
General Motors beat Wall Street's earnings expectations Tuesday while announcing capital returns that signal confidence in its turnaround.
The automaker reported adjusted earnings of $2.51 per share for Q4, above the $2.27 consensus. Alongside the results, GM announced a 20% increase to its quarterly dividend and a new $6 billion share repurchase authorization.
Shares rose more than 4% in premarket trading.
The Numbers Behind the Beat
Fourth-quarter adjusted EBIT came in at $2.8 billion. But the GAAP picture was messier: a net loss of $3.3 billion, driven by more than $7.2 billion in special charges.
Those charges—announced earlier this month—relate to GM's pullback from aggressive EV targets and restructuring in China. The company took impairments on battery plants, terminated supplier contracts, and wrote down its Chinese joint venture.
Strip out the one-time items, and the underlying business performed. That's what the adjusted EPS beat reflects.
Full Year Snapshot
For 2025, GM delivered $2.7 billion in GAAP net income and adjusted EBIT of $12.7 billion—translating to $10.60 per share on an adjusted basis. Free cash flow hit $10.6 billion.
Revenue slightly missed Q4 expectations, but margin performance carried the quarter. North American operations generated $10.45 billion in adjusted earnings for the year, though that figure was down 28% from 2024.
International operations—South Korea, Brazil, Middle East—contributed $737 million, up $434 million from the prior year.
The Capital Return Signal
The dividend hike and buyback authorization matter more than their dollar amounts suggest.
GM is telling investors that despite EV headwinds, despite China losses, despite $7 billion in writedowns, management sees enough stability in the core truck and SUV business to return substantial capital.
The company's 2026 adjusted EPS guidance aligns with Street consensus at roughly $11.73 per share. That's not aggressive growth, but it's not the crisis some bears predicted when EV demand softened.
The EV Question
GM's electric vehicle strategy has been the elephant in the room for two years.
The writedowns acknowledge reality: the EV transition is slower and more expensive than planned. Consumer tax credit expiration, weakening demand, and policy shifts from the Trump administration have all pressured the economics.
But GM isn't abandoning electrification—it's rightsizing. The dozen EV models currently sold in the US will continue. Investment pace is slowing, not stopping.
The market seems willing to look past EV execution issues as long as the traditional truck franchise delivers. Ford is navigating the same dynamic, and Toyota's patience on EVs looks increasingly vindicated.
What to Watch
Conference call commentary will matter for traders. Key questions: China trajectory, EV production plans for 2026, and whether additional charges are likely.
The beat-and-raise pattern—earnings surprise plus capital return—typically sustains momentum for a few sessions. But GM trades at roughly 5x forward earnings, reflecting persistent skepticism about long-term positioning in an electrifying industry.
That skepticism hasn't disappeared, but days like Tuesday make it harder to ignore the cash-generating machine that still exists in Detroit.