General Motors Co. announced Tuesday its 2017 earnings are expected to increase from 2016 with continued robust performance in North America, aided by new SUV launches, and strong business in China.
The company also says its 2017 earnings will be aided by growth from its finance subsidiary GM Financial; from improving South American business; and as it cuts corporate costs.
The Detroit automaker said it expects 2017 adjusted earnings per share to range from $6 to $6.50. For 2016, GM Chairman and CEO Mary Barra said adjusted earnings per share are tracking at the high end of the $5.50 to $6 a share the company said it would earn in 2016. GM expects revenue will grow in 2017 and that it will maintain or improve its pre-tax adjusted earnings and its pre-tax adjusted margin.
For 2016, Barra said GM said results are tracking for record revenue, pre-tax earnings and pre-tax margin. “We had a great year in 2016 in every respect,” she said.
The carmaker will announce its fourth quarter and full-year results for 2016 on Feb. 7.
In 2015, GM made a record $9.7 billion in net income. Its pre-tax earnings totaled $10.8 billion as earnings per share reached $5.91.
GM said Tuesday it plans to buy back an additional $5 billion in stock, on top of the $9 billion it already has announced. The carmaker said in March 2015 it would buy back up to $5 billion in stock by the end of 2016. That was expanded to a total $9 billion by the end of 2017.
The company said the new stock repurchase has no expiration date. The company through the end of 2016 had repurchased about $6 billion in shares.
GM gave its earnings outlook for the year at the 2017 Deutsche Bank global automotive conference in Detroit, held in conjunction with the North American International Auto Show.
“We generated consistently strong results, and we’ve done that for the last several years, while delivering great vehicles and establishing a leadership position in defining the future of personal mobility,” Barra said. “Going forward we will stay focused on executing our strategic plan and generating profitable growth that is needed to create long-term value for our shareholders.”
GM said it is boosting its cost-reduction target by $1 billion to $6.5 billion saved through 2018. The company said it already has achieved about $4 billion in cost savings and expects additional savings will come through material, logistics, manufacturing and general costs.
The automaker by 2019 expects to earn $2 billion more in pre-tax earnings through mobility services such as its car-sharing Maven business, GM Financial, aftersales parts and accessories, and OnStar. GM did not break out how much of those earnings would come from mobility services.
GM’s stock closed Monday at $36.01 a share. It was up Tuesday more than 2 percent in midday trading and after GM’s announcement, the shares jumped and were trading up 5 percent.