GM set to post higher Q2 profit despite falling US sales

General Motors will report second-quarter results before markets open on Tuesday, with analysts forecasting a notable divergence between its falling sales and rising profitability. The automaker is projected to post adjusted earnings per share of $3.19 on revenue of $46.61 billion. While revenue is down roughly 1% from the prior year, adjusted EBIT is expected to jump to $3.7 billion from $3 billion.

The bottom-line expansion highlights how GM has successfully insulated its margins from persistent trade headwinds. A year ago, tariff costs severely depressed earnings. Since then, the company has secured government offsets, reworked its supply chain, shifted production, and renegotiated with suppliers. Those structural changes were strong enough for GM to raise its full-year 2026 guidance when it reported first-quarter results in April.

That margin resilience arrives as top-line pressure mounts. GM sold approximately 715,000 vehicles in the US during the quarter, a 4.2% year-over-year decline that nonetheless kept it as the country's top-selling automaker. The drop primarily reflects the planned discontinuation of models like the Chevrolet Malibu and Cadillac XT4, combined with a sharp hangover in electric vehicle demand following the late-2025 expiration of the federal EV tax credit.

The EV pullback was severe, with Chevy Equinox EV deliveries falling 61.8% and the Blazer EV dropping 68.1%. However, GM retained its number two position in the EV market behind Tesla, holding an estimated 13.5% to 14% share. Highly profitable internal combustion models offset the EV weakness, as GMC Sierra pickups rose 5% to a record 95,147 units, and crossovers like the Chevy Trailblazer surged 28.4%.

Crucially, GM achieved this sales mix without sacrificing pricing. Average transaction prices exceeded $52,400, and the automaker noted that incentives have run below the industry average for three consecutive years. This pricing discipline is central to its full-year forecast, which calls for adjusted EBIT of $13.5 billion to $15.5 billion and automotive free cash flow of $9 billion to $11 billion.

The broader demand environment, however, remains a clear constraint. Elevated interest rates and record-high vehicle prices continue to pressure consumer affordability. Tight inventories have already begun to bite into full-size SUV sales, with Chevrolet Tahoe and Suburban deliveries down 8.1% and 20.4%, respectively. Investors will be watching Tuesday's report for any signs that these affordability headwinds are spilling over into the highly profitable pickup segment.