General Motors foresees strong performance across the board during FY17
Published By: Eunice Gettys on January 11, 2017 08:17 am EST
General Motors Company (NYSE:GM) provided an upbeat financial outlook for the fiscal year 2017 (FY17) on Tuesday during Deutsche Bank 2017 Global Auto Industry Conference held in Detroit. The guidance impressed the investors as it came in well-above Wall Street expectations. Consequently, GM shares traded in the green during yesterday’s active trading, rising about 3.72%.
Based on future strong performance expectations, General Motors expects FY17 earnings per share (EPS) to come in between $6-6.5, well above the consensus EPS estimate of $5.73. It also expects to sustain or enhance its adjusted EBIT margin, compared to FY16, on higher revenues along with generating $6 billion in free cash flow.
Moreover, the automaker announced that it will repurchase an additional $5 billion worth of shares under the company’s current stock repurchase program. The new authorization possesses no expiration date and brings the total share repurchases allowed to $14 billion. Therefore, General Motors aims at meeting its prior repurchases commitment of $9 billion by the end of FY17.
Additionally, GM announced that it aims on enhancing its cost efficiency target to $6.5 billion till FY18. The company also stated that approximately $4 billion of this target has already been attained during 2016. It further highlighted that the increased estimate reflects additional projected savings in logistics, materials, general administrative costs, and overall manufacturing.
The CEO of GM, Marry Barra expects the company to outperform going forward. She stated: “We’ve generated consistently strong results the last few years by delivering great vehicles, growing the topline and driving efficiencies, while at the same time establishing a leading position in shaping the future of transportation. We’ll stay focused on executing our strategic plan and generating the profitable growth needed to create long-term value for our shareholders.”