By Kalea Hall
April 28 (Reuters) – General Motors posted on Tuesday a 22% rise in first-quarter core profit and lifted its full-year earnings forecast, bolstered by a resilient U.S. car market and an expected tariff refund.
The Detroit automaker reported earnings before interest and taxes of $4.3 billion, or $3.70 per share, which beat analysts’ estimate of $2.62, according to LSEG data. Shares rose about 5% in premarket trading.
GM raised its 2026 profit outlook by $500 million, which is the same amount it expects to get back in refunds stemming from a U.S. Supreme Court ruling that struck down some of the Trump administration’s tariffs. It now expects full-year core profit to be $13.5 billion to $15.5 billion.
The higher projection comes despite a surge in commodity costs. GM now expects inflation in raw materials, computer chips and logistics to cut earnings by $1.5 billion to $2 billion this year, about $500 million more than it estimated late last year.
LOWER SALES BUT HIGHER MARGINS
The automaker’s quarterly net income dropped 6% from a year earlier to $2.6 billion, mostly due to a $1.1 billion charge to settle supplier claims for slowing electric-vehicle programs. Revenue of $43.6 billion was down less than 1%.
American consumers have continued buying cars despite a year of economic uncertainty from tariffs, elevated gas prices and a shaky job market. “We are clearly operating in a very dynamic environment, which isn’t unusual for this industry,” GM CEO Mary Barra said in a statement.
In North America, GM’s biggest money maker, its profit margin improved to 10.1% from 8.8% a year earlier, despite lower vehicle shipments to dealers and a 10% decline in sales in the first quarter.
The sales drop was partly explained by a tough comparison to first-quarter 2025, when U.S. buyers snapped up new vehicles in a rush to beat tariff-related price hikes.
The company’s pickup-truck sales remained strong despite U.S. gas prices surging to above $4 per gallon in March due to fallout from the war in Iran. GM finance chief Paul Jacobson told CNBC that customer traffic at U.S. dealerships remained steady in March and April.
GM said cost savings from eased tailpipe emissions regulations in the U.S., as well as lower warranty expenses, helped offset the decline in sales. Stronger pricing helped too: GM said the average price paid for its vehicles in the U.S. was $52,000 in the quarter, up about 3% from a year earlier.
In China, where GM is restructuring the business, the automaker reported equity income of $165 million, versus $45 million a year ago.
Its international business excluding China saw core profit of $123 million, up from $30 million.
Like many other automakers, GM has pulled back on production of EVs because of weaker demand following pro-fossil-fuel policies enacted by the Trump administration last year. GM’s EV sales fell 43% in the final three months of last year.
In addition to the $1.1 billion first-quarter charge, GM last year recorded $7.6 billion in writedowns on its EV programs.
(Reporting by Kalea Hall in Detroit and Nathan Gomes in Bangalore. Editing by Mike Colias and Mark Potter)
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