GM's Beat-and-Raise Quarter
General Motors reported strong second-quarter earnings and became the clear winner among automakers, rising about 4%. Ford climbed 2%, Tesla (reporting the next day) rose 4%, and Toyota gained 1.5%. The gains held even as fresh tariff headlines returned to focus.
The numbers: earnings of $3.57 a share, above the $3.20 the Street expected. Revenue of $48.03 billion beat the $47 billion forecast and rose 1.9% from a year earlier. North America drove the results.
CFO Paul Jacobson said first-half earnings per share were 25% higher than any first half in company history and called momentum "palpable." He called the stock a bargain at roughly $75; it traded at $78.50 on the move, up more than 40% from a year ago. He described consumer demand as resilient.
North American EBIT-adjusted margins hit 8.6%, up 2.5 points from a year ago, helped by lower warranty costs and better operating efficiency. GM expanded digital services revenue. EV losses improved by $1 billion to $1.5 billion this year versus 2025, a major driver. GM International, including the China joint venture, was profitable. CEO Mary Barra pointed to steady vehicle pricing and a strong lineup of pickup trucks and SUVs. The average vehicle transaction price was about $52,000 in the quarter as GM stayed disciplined on incentives.
The EV Pullback
GM said it has substantially finished the material charges tied to its retreat from electric vehicles, recording $10.9 billion in EV-related charges since the second half of last year. It has paid $4.5 billion of an expected $7.2 billion in cash charges tied to that pullback through the second quarter, and is nearing the end of it.
Raised Guidance, One Cut
GM raised full-year EPS guidance to $12 to $14, up from $11.50 to $13.50. It lifted adjusted automotive free cash flow guidance to $9.5 billion to $11.5 billion, up from $9 billion to $11 billion. Automotive operating cash flow for the current quarter rose about 9%. The company credited steady transaction prices, lower warranty costs, and shrinking EV losses.
One figure moved the other way: GM cut its forecast for net income attributable to stockholders to $8.4 billion to $9.8 billion, down from $9.9 billion to $11.4 billion. That was the second straight quarter of lowering that number, but it did not weigh on the stock, which held up about 3%.
Over the last 12 months the shares are up roughly 50%, though still down year to date.
An Options Trade Idea
The stock has room for more upside but is running into overhead resistance around $80 to $82. The trade is a simple call calendar spread. Implied volatility dropped after earnings "as the unknown became owned," making options a bit cheaper. The setup: buy the September slightly out-of-the-money $80 calls, sell the August $80 calls, paying about $1. This captures a roughly 10% term-structure edge on the bought option versus the sold one. Three sets of weekly options after August expiration allow further hedging to lower the cost if needed.
GM looks less volatile than the AI names, and investors may rotate toward stocks like it heading into the end of summer.
