DETROIT, Jan. 10, 2017 /PRNewswire/ -- General Motors Co.
(NYSE: GM) today said it expects its 2017 earnings per share (EPS)
diluted-adjusted to increase to $6.00-$6.50, up from its 2016 calendar-year
outlook of $5.50-$6.00. In 2017, the
company also expects to maintain or improve EBIT-adjusted and
EBIT-adjusted margin on higher revenues, compared to 2016, and
generate about $6.0 billion of
automotive-adjusted free cash flow.
Based on this strong outlook, the GM Board of Directors approved
an additional
$5 billion in common stock
repurchases under its existing share repurchase program, which was
announced March 9, 2015. The new
authorization, which has no expiration date, brings the total under
the program to $14 billion.
Share buybacks for the program's initial authorization of
$5 billion were completed in the
third quarter of 2016, one quarter earlier than planned. In the
fourth quarter of 2016, the company also completed $1 billion of the next $4
billion authorization declared in January 2016. The company expects to meet its
prior commitment to repurchase $9
billion of common stock by the end of 2017.
GM also announced a $1 billion
increase to its cost efficiency target, raising it to $6.5 billion through 2018, of which about
$4.0 billion has already been
achieved through 2016. The increased estimate is based on expected
additional savings in material, logistics, manufacturing and
general administrative costs.
Chairman and CEO Mary Barra,
President Dan Ammann and Executive
Vice President and CFO Chuck Stevens
shared this outlook with the investors and analysts attending the
Deutsche Bank 2017 Global Auto Industry Conference in
Detroit.
"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," Barra
said. "We'll stay focused on executing our strategic plan and
generating the profitable growth needed to create long-term value
for our shareholders."
GM's 2017 outlook is based on expected strong performance in
North America and China, growth of GM Financial, continued cost
efficiencies, improvement in South
America and an ongoing strong vehicle launch cadence.
Specifically, the company anticipates the proportion of its
global volume from new or refreshed vehicles – those in production
less than 18 months – to grow to 38 percent in the 2017-2020
timeframe, up from 26 percent during the 2011-2016 period.
Crossovers, trucks and SUVs as a proportion of GM's global volume
of new or refreshed vehicles in the 2017-2020 period are expected
to increase significantly, to 52 percent – up from 38 percent the
prior six years.
The company also reaffirmed its transparent capital allocation
framework, introduced in March
2015:
- Reinvesting in the business to achieve a 20 percent or greater
return on invested capital.
- Maintaining a strong, investment-grade balance sheet with a
target cash balance of $20
billion.
- Beyond reinvesting in the business and maintaining an
investment grade balance sheet, the company expects to return all
available free cash flow to shareholders on an ongoing basis.
"Success in this business depends to a great degree on where you
place your bets," Stevens said. "We'll continue to allocate capital
where we expect to generate significant margins, while we work to
drive business performance that meets our shareholder
commitments."
Among key accomplishments for 2016, the company noted the
following:
- On-track to deliver full-year records for revenue,
EBIT-adjusted and EBIT-adjusted margin.
- Expects to achieve full-year earnings per diluted-adjusted
share in the high end of its previously-stated range of
$5.50-$6.00.
- On-track to achieve more than a 10 percent EBIT-adjusted margin
in GM North America for the second straight year.
- On-track to sustain strong equity income in China.
- Generated four-quarter trailing ROIC-adjusted of 30.6 percent
through the third quarter.
- Through the end of 2016, the company has repurchased
$6 billion of common stock since
March 2015.
- GM's U.S. retail strategy drove a retail market share increase
of 0.5 points for the year, more than any full-line
manufacturer.
- GM delivered more segment winners than any other manufacturer
in JD Power's Vehicle Dependability, Initial Quality and APEAL
studies in 2016.
- Introduced the 238 mile-per-full-charge Chevrolet Bolt EV,
which won the 2017 Motor Trend and 2017 North American Car of the
Year awards.
- Formed partnership with Lyft to create an integrated network of
on-demand autonomous vehicles in the U.S.
- Acquired Cruise Automation to accelerate autonomous vehicle
development.
- Launched Maven car-sharing brand, which is operating in 16 U.S.
cities.
- Testing autonomous Chevrolet Bolt EVs on public roads in
Scottsdale, Arizona, San Francisco and Warren, Michigan.
General Motors Co. (NYSE:GM, TSX: GMM) and its partners
produce vehicles in 30 countries, and the company has leadership
positions in the world's largest and fastest-growing automotive
markets. GM, its subsidiaries and joint venture entities sell
vehicles under the Chevrolet, Cadillac, Baojun, Buick, GMC, Holden,
Jiefang, Opel, Vauxhall and Wuling brands. More information on the
company and its subsidiaries, including OnStar, a global leader in
vehicle safety, security and information services, can be found at
http://www.gm.com.
Forward-Looking Statements
In this press release and
related comments by our management, we use words like "anticipate,"
"appears," "approximately," "believe," "continue," "could,"
"designed," "effect," "estimate," "evaluate," "expect," "forecast,"
"goal," "initiative," "intend," "may," "objective," "outlook,"
"plan," "potential," "priorities," "project," "pursue," "seek,"
"will," "should," "target," "when," "will," "would," or the
negative of any of those words or similar expressions to identify
forward-looking statements that represent our current judgment
about possible future events. In making these statements we rely on
assumptions and analyses based on our experience and perception of
historical trends, current conditions and expected future
developments as well as other factors we consider appropriate under
the circumstances. We believe these judgments are reasonable, but
these statements are not guarantees of any events or financial
results, and our actual results may differ materially due to a
variety of important factors, both positive and negative. These
factors, which may be revised or supplemented in subsequent reports
on Forms 10-Q and 8-K, include, among others: (1) our ability to
maintain profitability over the long-term, including our ability to
fund and introduce new and improved vehicle models that are able to
attract a sufficient number of consumers; (2) the success of our
full-size pick-up trucks and SUVs; (3) global automobile market
sales volume, which can be volatile; (4) the results of our joint
ventures, which we cannot operate solely for our benefit and over
which we may have limited control; (5) our ability to realize
production efficiencies and to achieve reductions in costs as we
implement operating effectiveness initiatives throughout our
automotive operations; (6) our ability to maintain quality control
over our vehicles and avoid material vehicle recalls and the cost
and effect on our reputation and products; (7) our ability to
maintain adequate liquidity and financing sources including as
required to fund our new technology; (8) our ability to realize
successful vehicle applications of new technology and our ability
to deliver new products, services and customer experiences in
response to new participants in the automotive industry; (9)
volatility in the price of oil; (10) the ability of our suppliers
to deliver parts, systems and components without disruption and at
such times to allow us to meet production schedules; (11) risks
associated with our manufacturing facilities around the world; (12)
our ability to manage the distribution channels for our products;
(13) our ability to successfully restructure our operations in
various countries; (14) the continued availability of wholesale and
retail financing in markets in which we operate to support the sale
of our vehicles, which is dependent on those entities' ability to
obtain funding and their continued willingness to provide
financing; (15) changes in economic conditions, commodity prices,
housing prices, foreign currency exchange rates or political
stability in the markets in which we operate; (16) significant
changes in the competitive environment, including the effect of
competition and excess manufacturing capacity in our markets, on
our pricing policies or use of incentives and the introduction of
new and improved vehicle models by our competitors; (17)
significant changes in political, regulatory and market conditions
in the countries in which we operate, particularly China, with the effect of competition from new
market entrants, and in the United
Kingdom with passage of a referendum to discontinue
membership in the European Union; (18) changes in existing, or the
adoption of new, laws, regulations, policies or other activities of
governments, agencies and similar organizations, particularly laws,
regulations and policies relating to vehicle safety including
recalls, and including such actions that may affect the production,
licensing, distribution or sale of our products, the cost thereof
or applicable tax rates; (19) stricter or novel interpretations and
consequent enforcement of existing laws, regulations and policies;
(20) costs and risks associated with litigation and government
investigations including the potential imposition of damages,
substantial fines, civil lawsuits and criminal penalties,
interruptions of business, modification of business practices,
equitable remedies and other sanctions against us in connection
with various legal proceedings and investigations relating to our
various recalls; (21) our ability to comply with the terms of the
DPA; (22) our ability to manage risks related to security breaches
and other disruptions to our vehicles, information technology
networks and systems; (23) significant increases in our pension
expense or projected pension contributions resulting from changes
in the value of plan assets, the discount rate applied to value the
pension liabilities or mortality or other assumption changes; (24)
our continued ability to develop captive financing capability
through GM Financial; and (25) changes in accounting principles, or
their application or interpretation, and our ability to make
estimates and the assumptions underlying the estimates, which could
have an effect on earnings.
We caution readers not to place undue reliance on
forward-looking statements. We undertake no obligation to update
publicly or otherwise revise any forward-looking statements,
whether as a result of new information, future events or other
factors that affect the subject of these statements, except where
we are expressly required to do so by law.
GM's Investor Relations website at http://www.gm.com/investors
contains a significant amount of information about GM, including
financial and other information for investors. GM encourages
investors to visit our website, as information is updated and new
information is posted.
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SOURCE General Motors