GM Shares Jump 5% After Forecasting Higher 2017 Profits, Strong China Sales, $5 Billion Buyback

Tyler Durden's picture

So much for fears that a mini feud between the president-elect and General Motors, which was the target of one of Donald Trump's "make it in the USA or else" tweets, could pressure the stock of the US automaker.

Moments ago, CEO Mary Barra,  who is presenting at the Global Auto Industry Conference hosted by Deutsche Bank, gave some good news to shareholders, when she revealed the company's 2017 adjusted EPS forecast, which at $6.00-$6.50 was well above the consensus estimate of $5.73, and also substantially above the 2016 year end guidance presented on October 25, which forecast the auto company would make "at the high end" of a $5.50-$6.00 range. The improvement will be partially due to cost-savings, i.e., further layoffs, which are now targeted to contribute another $1 billion to the bottom line.

GM President Dan Ammann said: “It’s too soon to draw any firm conclusions obviously but December was a strong month capping off a pretty strong year, and early data on consumer confidence is favourable, equity markets are favorable, in all it looks like a favorable backdrop.”

Quoted by the FT, he said 2017 had “pretty robust underpinnings for another good year absent some external shock to the system”.

The company also expects to make more money in China, with slowing growth in the market offset by a demand for more expensive cars among increasingly-affluent consumers. “The growth rate is slowing down, pricing pressure is picking up, but much more of a mix in the market, we expect that dynamic to continue into 2017,” said Ammann.

The company also said that crossovers, trucks and SUVs as proportion of GM’s global volume of new or refreshed vehicles is expected to increase significantly to 52% in the 2017-2020 period compared to 38% in prior 6 years.

Finally, for good measure, Barra announced a fresh $5 billion buyback.

The combined effect of the two, has sent the stock surging as much as 5.6% higher, rising to a level not seen since March 2015...

... proppeling shares of Ford in sympathy, and prompting analysts (such as Goldman's) to ask if the long-anticipated downturn in the auto cycle has once again been delayed.

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NoDebt's picture

"GM Shares Jump 5% After Forecasting Higher 2017 Profits, Strong China Sales, $5 Billion Buyback"

Only one of those three made their stock pop 5%.  I leave it to you to figure out which.

 

Looney's picture

 

I wonder which carmaker will come up with a car with a full-sized wind turbine on top first?  ;-)

Looney

NoWayJose's picture

I'm betting it will be the Roadrunner with an Acme wind turbine! That would be a Looney Tune!

LowerSlowerDelaware_LSD's picture

"$5 Billion Buyback"

Holy shit. When is the "FREE money" for driving stock bubbles going to end? I can't imagine that GM simply has that kind of cash laying around. Do they?

spastic_colon's picture

you mean Govt Motors? of course they do....its all lying around on the feds balance sheet and printing press.....and funny how these are just "announcements" so we'll see if they use the entire 5B or get priced out before they have a chance to use it all.

LowerSlowerDelaware_LSD's picture

Yes, Gubmint Motors. Did the gubmint ever get completely out of GM?

Mon T's picture

Better not disagree with LowerDelewaretheLOSER. 

 

He will report you to the spam police.

 

Oh and whatever you do, do not mention SHEPWAVE.com.

 

LowerSlowerDelaware_LSD's picture

Hi Mon T! How are you doing my good friend? Remind me, again... you work for shepwave, correct? They are the spam company that sometimes does trading "analysis," but spends most of their time spamming, right? Wow, with so much time spent on it, the spam operation must be doing well. Otherwise you'd skip the spamming and do trading, right?

"LowerDelewaretheLOSER." I like it! I remember in elementary school kids used to make up names like that. Very cute! Wow, your company has some bright people working for it!...

aliens is here's picture

Still goverment motors.

NoWayJose's picture

Easier to get higher profits when you sell Mexi-Cars in the US and lie about it!

Last of the Middle Class's picture

Zactly what I was thinking. Guess they didn't learn shit after lying for 10 years about ignition problems and paying through the ass (TARP ass, that is). What a waste, this company is crap and so are their products.

NugginFuts's picture

oh, great! Share buybacks. That spells increased productivity for sure!

Mr. Schmilkies's picture

Sounds like fake news.

ihatebarkingdogs's picture

I guess Mary Barra is a member of the PPT, protecting her own stock options.  It's GOOD to be in the club.

Clowns on Acid's picture

Long Ford and Short GM is a great trade.

gdpetti's picture

Pump and dump, dump and pump... rinse and repeat endlessly until the money runs out... does that ever really happen? Isn't it only that no one wants it anymore?

1980XLS's picture

Good way to lose money with that one.

 

GM has outperformed Ford by 23% since July alone. and for good reason.

Sorry it does not fit your narrative.

 

https://finance.yahoo.com/chart/F#eyJjb21wYXJpc29ucyI6IkdNIiwiY29tcGFyaX...