General Motors Company (NYSE:GM) shares fell about 4% on Tuesday morning even after the automaker posted stronger-than-expected first-quarter earnings and raised its full-year profit outlook, helped in part by a favorable US Supreme Court ruling on tariffs.
The Detroit-based automaker reported first-quarter revenue of $43.6 billion, slightly ahead of analysts’ estimates of $43.38 billion, while adjusted earnings per share came in at $3.70, well above expectations of $2.61.
Adjusted EBIT rose 21.9% year-over-year to $4.3 billion, while adjusted automotive free cash flow climbed 56.4% to $1.27 billion.
GM said it was raising its full-year 2026 adjusted EPS guidance to a range of $11.50 to $13.50, up from its prior forecast of $11 to $13. It also lifted its adjusted EBIT forecast to between $13.5 billion and $15.5 billion.
The automaker said it now expects tariff-related costs of $2.5 billion to $3.5 billion this year, down from its prior estimate of $3 billion to $4 billion.
Still, investors pushed the stock lower as GM continues to face pressure from a challenging electric vehicle market, higher commodity and freight costs, and weaker automotive operating cash flow, which fell nearly 78% year-over-year to $533 million.
North America remained the company’s profit engine, with GMNA adjusted EBIT rising 11.4% to $3.66 billion and margins improving to 10.1%.
GM also pointed to growing momentum in its higher-margin software and services business, including OnStar and its Super Cruise hands-free driving system, as part of its strategy to offset pressure in its core EV operations.
Wedbush analysts said the results marked a “solid beat across the board,” describing the company’s turnaround as a “Rocky Balboa-like comeback in motion.”
The brokerage maintained its Outperform rating and $95 price target, citing stronger pricing across GM’s vehicle lineup, rising software revenue, and the benefit from tariff refunds.