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GM to Boost Dividends on Jump in Quarterly Earnings

Feb. 4, 2015
Sales worldwide grew 3.3% led by markets in North America, Asia/Pacific, Middle East and Africa.

Higher auto sales in the U.S. and some foreign markets are paying off for General Motors stockholders.

The automaker said it would raise dividends after reporting a jump in net income of 21% to $1.1 billion in the fourth quarter.

The largest U.S. car company continues to struggle in Europe, posting a nearly $400 million loss, up $30 million from the year before. But sales worldwide grew 3.3%, led by markets in North America, Asia/Pacific, Middle East and Africa.

Investors could see an even larger return later this year. GM CFO Chuck Stevens told Reuters the company will evaluate investor returns again in the second half after it wraps up legal issues tied to a faulty ignition switch blamed for the deaths of 51 people.

It’s thought GM may try to take a similar approach to its recall cases that Toyota took when it paid $2 billion dollars to settle charges is hid safety issues. However, civil cases could hold things up.

GM also told investors it would bump up spending for new vehicles and new technology in response to new environmental and safety standards. At the same time it plans to boost profit margins to as much as 10% over the next decade.

In January, Ford raised investor dividends 20% while GM stood pat, something that angered GM shareholders.

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