GM revs up forecast amid banner sales
Print Edition
GENERAL Motors lifted its 2016 earnings forecast and boosted its plan for capital returns to shareholders yesterday following a banner year for US car sales.
The biggest US carmaker raised its dividend by 6 percent to 38 US cents per share and increased its share repurchase program by US$4 billion to US$9 billion.
GM executives said they are targeting continued profit growth in the US and China and break-even profitability in Europe in 2016 and that it is on target with its goals for boosting profitability in the medium term.
“We made significant progress executing our strategic plan, and the results are being demonstrated through our improved earnings,” said GM Chief Executive Mary Barra.
The company raised its 2016 earnings per share range to US$5.25-5.75 from the prior outlook of US$5-5.50.
The moves come on the heels of booming US auto sales, with GM sales up 8 percent to 3.1 million in 2015.
Barra said GM expects the key China market will “be slower growth and it will be more volatile” over the short run as the world’s second-biggest economy encounters bumpier conditions. However, GM remains bullish on China in the long term, seeing potential for the overall car market to rise from 25 million cars per year to 35 million per year.
In Europe, the outlook is for a return to break-even conditions. Through the first three quarter of 2015, GM’s operating loss in Europe was US$515 million. “We continue to see fairly aggressive pricing in Europe, but we are seeing a little improvement in volume,” said GM President Dan Ammann.
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