General Motors on Wednesday (13 January) announced an increase to its 2016 earnings per share adjusted outlook to between US$5.25 and $5.75, up from the prior outlook of $5.00 to $5.50 provided on 1 October, 2015. The company also expects improved EBIT-adjusted, EBIT-adjusted margin and automotive adjusted free cash flow.
Based on this outlook, directors have authorised an increase to the company's existing common stock repurchase programme, bringing the total to $9bn – an increase of $4bn – while extending the programme to the end of 2017. The board also authorised an increase in the regular quarterly common stock dividend of 6%, to $0.38 per share, beginning in the first quarter of 2016.
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Chairman and CEO Mary Barra, president Dan Ammann, and CFO Chuck Stevens shared this outlook with the investment community attending the Deutsche Bank 2016 Global Auto Industry Conference in Detroit.
"We made significant progress executing our strategic plan and the results are being demonstrated through our improved earnings," Barra said.
The company's 2016 outlook is based on a strong product launch plan, growth in adjacent businesses, continued emphasis on driving core efficiencies across the enterprise, and expected modest global industry growth.
The company said continued execution of its plan should keep GM on track to achieve 9% to 10% EBIT-adjusted margin by early next decade. The strategic plan calls for sustained growth in the company's core business and includes several major initiatives:
- Lead in product and technology.
- Growing the Chevrolet and Cadillac brands globally.
- Continue driving growth in China.
- Continue growing GM Financial.
- Delivering core operating efficiencies.
Among key accomplishments for 2015, the company noted:
- On-track to deliver double-digit growth in EBIT-adjusted and EPS-adjusted in calendar year 2015.
- Achieved its targeted 10% EBIT-adjusted margin in North America one year ahead of plan.
- Since announcing the initial share repurchase program in March 2015, the company repurchased 70% of the authorised programme through the end of 2015, or $3.5bn.
- GM Financial continued to grow as GM's captive finance unit by tripling its penetration of GM's US retail sales to approximately 30% in calendar year 2015, up from 10% in calendar 2014.
- Increased Opel/Vauxhall market share for the third straight year in Europe.
- Launched key car-sharing programme in the US with Let's Drive NYC and in Europe with Opel's CarUnity and announced an autonomous car-sharing program on the Warren Technical Centre campus with Chevrolet Volts.
- On 4 January, 2016, announced a long-term strategic alliance with Lyft (LYFT).
GM also outlined several actions designed to improve the company's capital efficiency, resulting in a significant reduction in longer-term capital expenditures. GM continues to expect capital expenditures of 5% to 5.5% of revenues in the near-term.
"Our commitment to improve our performance in 2016 will build on our strong operating results of the past two years, and support improved shareholder returns," Stevens said.
