General Motors Q3 Preview: Strong Sales, But Margins Under Fire

General Motors GM will report Q3 results on October 21 before the market opens. Analysts expect revenue to fall 8% to $45 billion, while EPS is projected to drop 23% to $2.28. Despite the softer fundamentals, the stock is up 7% year to date and nearly 50% since April.

That said, there are a few yellow flags investors want answers to. On the volume side, U.S. vehicle sales are holding up. General Motors said its U.S. vehicle sales rose 8% in Q3, helped by strength in both ICE and EV models, with GMC tracking toward its best year ever. Yet margin compression is a growing concern. Price incentives, product mix shifts, and new tariffs on imported auto parts and metals are starting to filter through the supply chain, lifting production costs at North American plants and squeezing profitability.

Adding to that pressure, GM disclosed $1.6 billion charge this quarter related to EV capacity adjustments and supplier contract cancellations following the loss of the $7,500 federal EV tax credit and softening demand for electric vehicles. This could deepen the profit decline beyond the Street's base estimate.

Investors will look for commentary on how GM plans to manage tariff exposure and whether higher prices will be passed on to consumers. Lastly, analysts will also want to know if the recent surge in U.S. vehicle sales reflects buyers pulling purchases forward ahead of tariff increases, a trend that could reverse in the coming quarters and make the company's outlook one of the key focuses for the call.