General Motors is expecting a big 2016. The company has raised its earnings projection by 25 cents a share, boosted its dividend, and increased its buyback.
GM forecast adjusted earnings per share of $5.25 to $5.75 for the year. Anticipating better profits, GM’s board raised the share buyback plan from $5 billion to $9 billion and boosted the dividend to 38 cents a share from 36 cents.
GM expected continued but slowing sales growth for its North American and China businesses.
The company’s announcement follows Ford Motor Co., which projected record profits in 2016 and announced a special dividend of $1 billion.
“We made significant progress executing our strategic plan and the results are being demonstrated through improved earnings,” Chief Executive Officer Mary Barra said Wednesday. “We expect to sustain strong margins in North America and China and break even in Europe.”
Carmakers in the United States recorded a record 17.5 million cars and light trucks sold in 2015. GM expects light-vehicle’s to be a big hit in 2016.
Even as China’s markets are rocked, GM management still sees the market growing.
GM is relying on strong profits in North America with several key new models coming to market this year, such as the Chevrolet Malibu and Buick Lacrosse family sedans and the GMC Acadia and Cadillac XT5 sport utility vehicles.
GM earnings higher profits from its larger vehicles, specifically SUVs and crossovers. With gas prices expected to remain low, the company will likely see strong demand for those larger, less fuel-efficient vehicles.