GM raises 2018 forecast, predicts stronger 2019 earnings
DETROIT (AP) — General Motors strengthened its pretax profit estimate for 2018 and predicted even stronger performance for this year as it executives made a presentation to investors on Friday.
Shares jumped nearly 9 percent in midday trading.
CEO Mary Barra also says the company doesn’t foresee any further job cuts through 2020. Last year GM announced plans to close five North American factories and lay off 14,000 salaried and blue-collar workers.
The company predicts 2018 pretax, per-share profits will be higher than the $5.80 to $6.20 range it forecast in the third quarter. For 2019, it expects that to increase to $6.50 to $7.
The rosy profit forecast comes despite declining sales for the company in the U.S. and slowing sales in China. GM also plans to exit several car lines in the U.S. in the coming year.
The outlook exceeded Wall Street’s expectations for both years. Analysts polled by FactSet expect pretax earnings of $6.24 for 2018 and they predict a decline for this year, to $5.92.
In a briefing for reporters before the presentation in New York, Barra said GM has enough new trucks and SUVs coming this year to offset any U.S. sales decline caused by scrapping car models such as the Chevrolet Cruze.
The company is rolling out new full-size pickup trucks and has heavy-duty versions coming later in the year. It also will have a full year of sales for the Cadillac XT4 and Chevrolet Blazer new SUVs, as well as new Cadillacs to be announced later, she said. “We think we have a very, very strong product portfolio this year, and we’re really looking forward to getting those vehicles, trucks crossovers in to the marketplace,” she said.
Chief Financial Officer Dhivya Suryadevara said restructuring efforts will help GM’s bottom line in 2018 by $2 billion to $2.5 billion, with a total benefit of $4.5 billion in cost savings and $1.5 billion less in capital spending by the end of 2020.