General Motors Co (NYSE:GM). has updated its financial outlook and announced a series of strategic financial moves aimed at enhancing shareholder returns and setting a course for future growth. The company, led by Chair and CEO Mary Barra, has reinstated its full-year earnings guidance following disruptions such as the UAW strike, which had previously impacted production schedules.
The automaker has outlined robust profit projections despite the strike's effect on earnings before interest and taxes (EBIT), which required an adjustment of approximately $1.1 billion. For the year ending December 31, 2023, GM now expects net income available to common stockholders to be between $9.1 and $9.7 billion, with an adjusted EBIT forecast of $11.7 to $12.7 billion.
In a bold move to return value to shareholders, GM has unveiled a $10 billion accelerated share repurchase (ASR) initiative, which will see an immediate retirement of shares worth $6.8 billion as part of the forward payment agreement. The total number of shares repurchased will be based on GM's average stock price over the term of the ASR, with completion expected by the fourth quarter of 2024. This initiative is managed by financial institutions including Bank of America, N.A., Goldman Sachs & Co (NYSE:GS). LLC, Barclays Bank PLC, and Citibank, N.A.
Additionally, GM has announced an increase in its common stock dividends of 33%, effective January 2024. Shareholders can look forward to a quarterly dividend boost to 12 cents per share starting in January of the following year.
The company has also made strategic financial adjustments, terminating an existing $6 billion credit arrangement from October in favor of a new $3 billion credit line with the banks engaged in the ASR. This move provides GM with additional flexibility for future share repurchases outside of the current ASR plan.
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