General Motors has said that it expects a ‘modest’ improvement to earnings in 2014. Its latest guidance appeared to disappoint some analysts and investors.
GM said that based on this outlook and the introduction of key vehicles globally, the company expects its total earnings before interest and tax (EBIT) adjusted to be modestly improved with improved underlying operating performance more than offsetting increased restructuring expense. Additionally, the company said it expects EBIT-adjusted margins will be similar to last year.
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“We continue to perform well in the two most important markets in the world, the U.S. and China,” said GM CEO Mary Barra. “We’re taking advantage of our strength in these countries to restructure and make the investments necessary to grow profitably in other parts of the world.”
GM President Dan Ammann shared the outlook with investor analysts attending the Deutsche Bank 2014 Global Auto Industry Conference in Detroit.
Joseph Spak, an analyst with RBC Capital Markets, said in an investment note that GM’s guidance was somewhat disappointing. However, he also said that the “guidance also gives the new management team a little more wiggle room to deal with in their first year”. Morgan Stanley analyst Adam Jonas called GM’s guidance “appropriately conservative”.
GM said that following 18 vehicle launches in 2013 in the US, the company will introduce 15 new or upgraded models in that market this year. In China, GM and its joint venture partners will introduce 17 new or upgraded models in 2014, it said. The company also announced plans to open four additional plants in China through 2015, enabling production of up to 5m units annually.
Vehicles being introduced in key markets globally in 2014 include the Chevrolet Silverado HD, Tahoe, Suburban, Colorado, Aveo and Sail; Cadillac ATS Coupe, CTS and Escalade; GMC Sierra HD, Yukon XL, Denali XL and Canyon.
“In 2014, our focus will remain on winning customers by delivering new vehicles with compelling value and outstanding quality,” Ammann said. “Our ongoing work to transform our company into a formidable competitor in every market we serve will continue unabated.”
