DETROIT – General Motors lifted its 2016 earnings forecast and boosted its plan for capital returns to shareholders Wednesday following a banner year for U.S. car sales.
America’s biggest carmaker raised its dividend by 6% to 38 cents per share and increased its share repurchase program by $4 billion to $9 billion.
GM executives said they are targeting continued profit growth in the United States and China and breakeven profitability in Europe in 2016, and that it is on target with its goals for boosting profitability in the medium term.
“We made significant progress executing our strategic plan and the results are being demonstrated through our improved earnings,” GM chief executive Mary Barra said.
The company raised its 2016 earnings per share range to $5.25-$5.75 from the prior outlook of $5.00-$5.50. The moves come on the heels of booming U.S. auto sales for virtually all carmakers, with GM sales up 8% to 3.1 million in 2015.
Barra said GM expects the key China market will “be slower growth and it will be more volatile” over the short run as the world’s second-biggest economy encounters bumpier conditions.
However, the company remains bullish on China in the long term, In Europe, the outlook is for a return to break-even conditions. Through the first three quarters of 2015, GM’s operating loss in Europe was $515 million.
“We continue to see fairly aggressive pricing in Europe,” GM president Dan Ammann said. “But we are seeing a little improvement in volume.”
Shares in GM jumped 4.3% to $31.60 in pre-market trade.
Copyright Agence France-Presse, 2016