General Motors reported quarterly earnings of $2.8 per share, surpassing the Zacks Consensus Estimate of $2.28. This represents an earnings surprise of +22.81%. In the same period last year, they earned $2.96 per share. Over the last four quarters, GM has exceeded EPS estimates every time.

The company recorded revenues of $48.59 billion for the quarter ending September 2025, beating the consensus by 9.76%. This is slightly down from $48.76 billion in the previous year. GM has also surpassed revenue estimates four times in the past four quarters.

General Motors shares have increased by about 8.9% since the start of the year, compared to the S&P 500’s 14.5% rise. Although GM’s performance has lagged behind the market, their earnings outlook could shed light on future movement. Their current Zacks Rank is #3 (Hold), suggesting the stock might align with market trends in the near future.

Lucid Group, from the same industry, is set to announce its results on November 5. Lucid is projected to report a quarterly loss of $2.32 per share. Their expected revenues are $325.59 million, which marks a 62.8% increase from the previous year.

Given that General Motors just posted a strong beat on earnings and revenue, we need to focus on the immediate drop in implied volatility. Implied volatility for GM options was likely elevated above 45% heading into this announcement, and with the news now public, we’re seeing it contract toward the 35% range. This “volatility crush” means anyone holding long puts or calls just lost value, even if the stock moves in their favor.

The positive earnings surprise of over 22% suggests a potential upward drift in the stock price over the next few weeks. For those who believe this strength will continue, selling out-of-the-money put credit spreads is a viable strategy to collect premium. This approach benefits from both a rising stock price and the continued decay in option volatility.

However, we must weigh this against the broader economic picture and the company’s own performance. Revenues were flat compared to this time last year, and the stock has lagged the S&P 500 significantly in 2025. With national auto loan delinquency rates recently climbing to 2.8%, the highest since the financial crisis era of 2010, there are clear headwinds for the entire automotive sector.

The industry itself remains weak, ranking in the bottom quarter of all sectors, which tells us this is not just a GM-specific issue. We’ve seen demand soften throughout 2025 as higher interest rates, which were a major factor back in 2023 and 2024, continue to make financing new vehicles expensive for consumers. A single strong quarter for GM may not be enough to fight this powerful industry-wide trend.

This presents a relative value opportunity, especially when looking at competitors like Lucid, which is expected to report another significant loss on November 5th. A potential pairs trade could involve buying GM calls while simultaneously buying puts on LCID. This strategy bets on the market rewarding GM’s proven profitability while punishing competitors who are still struggling with cash burn and production targets.

Ultimately, the most critical factor will be the management commentary from today’s earnings call. We should listen closely for their guidance on fourth-quarter demand and their outlook on profit margins for 2026. Any sign of caution from them could quickly erase today’s post-earnings gains, making it prudent to keep any new positions small until their full forecast is clear.