On Tuesday, General Motors Company GM 1.12% said it expects 2017 diluted EPS guidance to increase to $6.00-$6.50, higher than the $5.83 average analysts had expected. In addition, the company expects to maintain or improve EBIT-adjusted margins in the coming year.
GM management shared the updated guidance with investors and analysts at the Deutsche Bank 2017 Global Auto Industry Conference in Detroit.
The GM board has also authorized an additional $5 billion in buybacks to the current share repurchase program. The new addition brings the total authorized budget for buybacks to $14 billion. GM expects to complete $9 billion in buybacks by the end of 2017.
GM has also increased its cost savings target in coming years by $1 billion. The company has already achieved $4.0 billion in cost savings through 2016, but now expects to hit $6.5 billion by the end of 2018. The company expects the additional cost-cutting to come from material, logistics, manufacturing and general administrative costs.
“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,” CEO Mary Barra said.
GM also reaffirmed its capital allocation initiative, which consists of reinvesting enough to maintain at least 20 percent return on invested capital (ROIC), maintaining a cash balance of $20 billion and returning all additional free cash flow to shareholders.
The company also highlighted several key accomplishments in 2016, including full-year records for revenue and EBIT-adjusted margin. GM also gained 0.5 percent U.S. retail market share on the year.
On the technology front, GM’s recently-launched Chevrolet Bolt EV just won the 2017 Motor Trend and 2017 North American Car of the Year awards. GM entered into a partnership with Lyft to develop a U.S. network of on-demand autonomous vehicles. GM also tested autonomous Bolts in public roads in a handful of U.S. cities.
In her presentation at the conference, Barra said…
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