General Motors CFO Paul Jacobson joins 'Squawk Box' to discuss the company's quarterly earnings results, state of the consumer, impact of tariffs, and more.
What Paul Jacobson said
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GM CFO Paul Jacobson discussed the company's Q2 2026 results, which beat expectations with earnings of $3.57 per share and revenue of $48 billion. He attributed the performance to inventory and incentive discipline, noting incentives were 4.7% of MSRP versus the industry's 6.3%. Jacobson highlighted a 25% increase in first-half EPS compared to any prior year, and raised the full-year earnings outlook to $12-$14 per share. He addressed consumer resilience, with a 42% truck market share and flat pricing, and said tariffs would impact by $2.5-$3.5 billion this year, with minimal effect from new tariffs. He expressed optimism about USMCA resolution, noted warranty savings increased to $1-$1.5 billion, and defended the stock's valuation, citing $2 billion in Q2 buybacks and over 35% of shares retired since 2023.
Key takeaways
GM raised full-year earnings outlook to $12-$14 per share, up from $11.50-$13.50.
First-half EPS is 25% higher than any prior first half in company history.
Tariff impact for 2026 remains $2.5-$3.5 billion, with minimal effect from new tariffs.
Warranty savings increased to $1-$1.5 billion for the year, up from $1 billion.
GM bought back $2 billion in stock in Q2 and $3 billion in the first half.
Welcome back everybody. Shares of GM this morning up by about 6/10 of a percent. That's a gain of $0.45. The automaker reported profits of $3.57 a share. That beat estimates of $3.20, and revenue of $48 billion was above expectations of $47 billion. GM is also raising its full year earnings outlook to 12 to $14 a share. That's up from 11.50 to $13.50 previously. The automaker's also increasing its free cash flow forecast. Talking about a lot of good trends here sees pricing on North America up by 0.5%. It had seen it flat up 0.5%. Joining us right now to talk about all of this is Paul Jacobson. He is GM CFO. And Paul, good morning.
Yeah, I'm looking through and every metric you all seem to beat expectations. The best I can tell, it looks like the second quarter incentives were averaging 4.7% of the manufacturer's suggested retail price versus 6.3% for the industry. You say you're continuing to increase operating efficiency, and that you expect these trends to continue into 2027 and beyond. I guess my surprise is that the stock is only up by about 8/10 of a percent at the moment. Would you expect to see more based on what you came out with today?
Well, you know, it's still early in the day. But what I would say is these results are very consistent with what we've been doing for the last several years. Our inventory discipline, our incentive discipline, which has been below that industry average for more than three years, has really led to these consistent type results. So whether it's, you know, tariffs or semiconductor challenges, etc., the teams really executed well. And this quarter is no different. You know, I think the amazing thing is when you look at the cumulative effect of all of this, our first half earnings per share is 25% higher than the first half at any time in our history. And actually more than six out of the last ten full years we've already recorded in the first six months. So this momentum is palpable. And it's something that we think is going to continue.
Well, I think there are a lot of macro concerns that are out there, whether it's affordability issues, higher gas prices, tariffs, the conflict in the Middle East, etc. And what we try to do is we try to set that aside and just make sure that we go out and execute. And again, the team did a fabulous job. We're seeing momentum in our warranty improvement. We've taken up from what we thought was going to be about $1 billion of savings this year, year over year to $1 billion to $1.5 billion. So we're seeing good traction there. We're seeing consistent pricing and go-to-market effects. So, you know, our full-size truck sales are up about 4%. Incentives are down, as you mentioned earlier. So our consumer has been very resilient. We've got a very broad portfolio, probably the best portfolio we've ever had in our history. And we can meet customers at all price points. And that's working really, really well for us.
Let's run through that list of concerns and we can talk about each one of them. How is the consumer doing right now? I think you said that you were actually looking at pricing power, at least in North America. How does the consumer look from your perspective?
Yeah, our pricing has been relatively flat after we put in some model year 2026 increases at the end of last year. So it's not like we're taking a lot or raising a lot of prices. It's just been very consistent. And on the demand side, you know, we've got a 42% market share in trucks. Truck volumes are up a little bit. We expect them to be flat for the year, but that's largely because we're coming out with the next generation of full-size trucks late this year, early next year. So as we do that model year cutover, we'll lose some production. But that's going to give us even more momentum into 2027. So I would say the consumer has been resilient in every measure that we're looking at across the portfolio.
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Jacobson, P. (2026, July 21). GM CFO Paul Jacobson on Q2 results, consumer demand and tariffs impact [Interview transcript]. CNBC Television. CEOInterviews.AI. https://ceointerviews.ai/interview/1114716/
MLA
Paul Jacobson. "GM CFO Paul Jacobson on Q2 results, consumer demand and tariffs impact." CNBC Television, 21 Jul. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/1114716/.
BibTeX
@misc{jacobson2026_1114716,
author = {Paul Jacobson},
title = {GM CFO Paul Jacobson on Q2 results, consumer demand and tariffs impact},
howpublished = {Interview transcript, CNBC Television. CEOInterviews.AI},
year = {2026},
month = {jul},
url = {https://ceointerviews.ai/interview/1114716/},
note = {Speaker-attributed transcript with timestamps}
}
