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Saturday, February 22, 2020  Spokane, Washington  Est. May 19, 1883
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News >  Business

GM sees higher profit in ‘17, plans $5 billion share buyback

By David Welch Bloomberg

General Motors forecast profit will rise to as much as $6.50 a share in 2017 after meeting the high end of last year’s target, enabling the largest U.S. automaker to buy back $5 billion worth of its shares.

Net income should increase to between $6 and $6.50 a share this year, Chief Executive Officer Mary Barra said in a statement. Stronger global revenue and growth in the U.S. and China should boost results from the $5.50 to $6 a share projected for 2016, Barra said. The average estimate for 2017 adjusted profit is $5.73 a share among analysts in a Bloomberg survey.

GM rose 4.9 percent to $37.79 as of 1:13 p.m. Tuesday in New York trading.

Even as global auto sales growth slows, GM is finding ways to boost revenue and profit by introducing new models and trimming costs. With new sport utility vehicles including the Chevrolet Equinox going on sale in the U.S. and the Cadillac XT5 in China, GM will be able to cash in on a global customer shift to larger, more expensive vehicles.

“We had a great year in 2016 in every respect,” Barra said. “Our overall financial outlook for 2017 is based on expected strong performance in North America and China, strong growth at GM Financial, continued cost efficiency and improvement in South America.”

Barra said GM will improve margins, earnings before interest and taxes and revenue. She also said free cash flow should be $6 billion in 2016 and the same in 2017.

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