Al Root

General Motors reported better-than-expected third-quarter earnings. Investors are happy. They bid shares up to a record high on Tuesday.

GM reported a quarterly operating profit of $3.4 billion from revenue of $48.6 billion. Wall Street was looking for an operating profit of $2.7 billion from revenue of $45 billion.

Management's forecast of full-year 2025 operating profit was raised to a range of $12 billion to $13 billion from $10 billion to $12.5 billion. GM earned a 2024 operating profit of almost $15 billion.

Tariffs are partly responsible for the decline. GM did lower its 2025 forecast of the effects of tariffs by $500 million to a range of $3.5 billion to $4.5 billion.

Management's new forecasts imply a fourth-quarter operating profit of about $2.4 billion, in line with Wall Street projections.

Shares ended the session up $8.62, or 15%, at $66.62, marking a record-high close, according to Dow Jones Market Data. (GM emerged from bankruptcy protection in 2009 and shares began trading again in 2010.)

GM's results were helping Ford Motor, too. Its shares added 4.6%, closing at $12.56. The S&P 500 was flat, and the Dow Jones Industrial Average gained 0.5%.

Earnings and guidance were a relief after a volatile year for American car makers that have had to deal with tariffs, changing policies, and uncertain demand. Coming into the week, GM stock was up about 10% this year, trailing behind the S&P 500 by almost four percentage points.

The loss of the $7,500 EV purchase tax credit, which expired in September, should pressure EV profitability. GM recently took $1.6 billion in write-downs related to EV assets, a sign it doesn't see the technology spreading in the U.S. as fast as it once did.

Still, car demand has been remarkably solid in 2025, despite EV and tariff noise. Through August, U.S. new car sales were up about 4% year over year, despite new car prices rising about 4% year over year. (The average transaction price for a new car in September was more than $50,000.)

"While the tariff headlines and recent EV impairment charges continue to put further pressure on the bottom line in the near-term...GM continues to impressively navigate the complex backdrop while seeing stable demand for its entire fleet," wrote Wedbush analyst Dan Ives in a recent report.

GM sold more than 710,000 vehicles in the U.S. in the third quarter, up 8% year over year.

Ives called the quarter strong. He rates the shares at Buy and raised his price target by $10 to $75 a share.

Options markets implied shares would move about 5%, up or down, following earnings. The big jump shows that GM's numbers qualify as a welcome surprise.

Shares have moved an average of about 7% over the past four quarterly reports. Shares have fallen three times and risen once over that span.

Write to Al Root at allen.root@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

October 24, 2025 14:41 ET (18:41 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.