GE & GM Earnings, Plus Deals, Deals, Deals

In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Tyler Crowe, Matt Frankel, and Lou Whiteman discuss:

• GE’s earnings in a time of high fuel prices.
• GM’s earnings (also in a time of high fuel prices).
• Salesforce’s deal for Braze.
• Tradeweb Market’s Trumid acquisition.

To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center. When you’re ready to invest, check out this top 10 list of stocks to buy.

A full transcript is below.

This podcast was recorded on Oct. 20, 2026.

Tyler Crowe: Earnings, deals, and a mailbag — oh, my! Motley Fool Hidden Gems Investing starts now. Welcome to Motley Fool Hidden Gems Investing. I’m your host, Tyler Crowe. Today, I’m joined by longtime Fool contributors, Matt Frankel and Lou Whiteman. It has been a busy news day. There’s been a couple of merger and acquisition deals. Apparently Merger Monday came one day late, unfortunately. Also, Lou, we got what call it a fan mail bag that was designed specifically for you, and I’m sure Matt will have his thoughts as well, but we are going to start. It is the thick of earning season, and we do want to get into it. We had defense companies. We’ve got banks, we’ve got autos, everything a little bit of a Schmorgasbord — except for maybe the Mag Seven; some of the other big chip semiconductor stocks are going right now.

Before, when we were planning the show, I went to you guys and gave you free runs, whatever you find, whatever its Hidden Gems recommendation or maybe one of your personal favorites in the area. Basically, I want to say, what are the companies you were looking at, and what is the market getting right and wrong about the companies? Lou, I’m going to start with you because you first pointed out GE Aerospace. I think with rising jet fuel prices around the world, everyone’s like, “Is that going to change how these airlines are doing what they’re doing?”

Lou Whiteman: Eventually. I think that’s the big takeaway, is I think the market is getting this one right. GE Aerospace beat, surprisingly, strong led by engines, 7% above consensus on engine earnings. A lot of that is Tyler, and we’ve talked about this a lot. A lot of this is services. It’s not exactly new sales, but it’s that these engines are being run hard. They need to be serviced, spare parts were up 20% on the engine side of the business. Services just GE going in, doing some of the maintenance work up 17%. But look, here’s the deal. How long will this last is I think the question that everybody’s asking right now. I think the airlines have basically said that they’re going to be strong through the holiday season, but at current demand trends, schedules are going to fall off a cliff come January. I think that GE is seeing that too.

Interesting, they raised full-year guidance for earnings, but they just beat. If you take that full-year guidance and add up the three quarters that we know, their raised guidance implies that the fourth quarter will come in below consensus. I think the takeaway here is the cycle hasn’t collapsed, but we are in the late innings, and you’re buying a 40-times earnings right now. I think the market has this one right to yawn at these. It’s not the end of the world here, but it does look late in the cycle.

Tyler Crowe: One of our deep market theories has been on maintenance companies in the airlines; it’s the discussion you and I have been having a lot. As you were saying, spare parts are really up. Do you think that we’re going to see a lot of that trickle down into some of those maintenance service overhaul companies?

Lou Whiteman: To some extent, I do think that, look, these companies, the airlines, see a great advantage in just taking one cycle out of their existing fleets right now because, again, they are running these planes as hard as they can. If you can just go from, say, four round trips a day to three round trips and some of this equipment, you can delay maintenance because maintenance is mostly by miles or mostly by minutes run. I think you see a world where demand still remains relatively strong but not quite as strong, and the airlines get to save on cost by reducing just the maintenance turn — how fast they have to do maintenance. That’s not great news for the MROs. The good news is that there is still a lot of work to be done, and if we do see a slowdown, we’ll see more conversions because the freight industry is desperate for capacity right now. Even in the worst-case scenario, even if planes come out of the passenger systems, that becomes the next cargo jet; there’s still work to be done.

Tyler Crowe: Matt, I want to turn to you. We’ll go from airlines or airborne mobility to on-the-ground mobility because you wanted to talk about General Motors, which, at first glance, I saw the numbers looked pretty good, but the market reaction was a little bit on the tiptoe side. What is the market saying, and what are they getting right? Maybe what the market is missing with this most recent earnings reports and maybe anything else that came out of the conference call or something like that.

Matt Frankel: I’m talking about the other general here, General Motors. I feel like it’s par for the course for General Motors to do exactly what you said, issue numbers at first glance look great. The market just shrugs it off and said, “We’re going to value this thing at six times earnings forever and ever.” You’re right. It was a very solid quarter on the surface. Revenue and earnings both beat estimates. North America was especially strong margin expansion due to a great product mix. Their trucks and the big SUVs are where they make the most money and had best Q3 pickup sales ever. That’s a pretty nice accomplishment in a market that’s supposedly struggling. Automotive free cash flow is almost $6 billion to four-year high. They bought back $2.5 billion of stock in the third quarter, another billion dollars so far in October, and they just announced a new $20 billion buyback authorization. This is a company whose market cap is about $68 billion. A $20 billion buyback is significant. That’s a lot. Software and services revenue were especially strong. Their EV cleanup is mostly done, all those charges they’re taking related to the EV split down.

Why was the stock down about 5%? A couple of reasons no guidance raise is a big one. When you beat expectations for the third quarter and fail to raise guidance for the full year, you’re implying that you’re going to have a slowdown in the fourth quarter. I think that’s what the market’s perceiving here. They mentioned commodity inflation, that’s adding to costs, and that includes memory chips, which are a big component of cars these days. International profits were just ugly. GM is a North American story right now. The international profits were not doing well. Financial delinquencies on the GM financial side of the business rose from 3.2%-3.7%, indicating that consumers might be getting strained. They take a lot of credit risk with their loans. They really used softer language when discussing 2027. I’m not sure that the market’s getting this wrong. There’s legitimate reason to worry that they are at the peak of their margins for this cycle. GM Financial is certainly a reason to be concerned. The buyback math is enormous. Trades for six times earnings. Their software revenue is doing fantastic, $7.5 billion of deferred software revenue and Supercrws revenue alone grew 60% year o

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