GM Reinstates FY Guidance, Initiates $10 Bln Share Buyback And Hikes Dividend; Stock Up

(RTTNews) - General Motors Co. (GM) reinstated its full-year 2023 earnings guidance that was withdrawn after roughly six weeks of U.S. labor strikes by the United Auto Workers union. The reinstated guidance included an estimated $1.1 billion EBIT-adjusted impact from the UAW strike, primarily from lost production. The company also announced a $10 billion accelerated share repurchase program and its intention to increase its common stock dividend by 33% beginning with the January 2024 declaration.

In Wednesday pre-market trade, GM was trading at $30.90 up $2.01 or 6.96%.

GM now anticipates full-year 2023 capital spending to be $11.0 billion - $11.5 billion, which is at the low end of its prior guidance range of $11.0 billion - $12.0 billion.

"We are finalizing a 2024 budget that will fully offset the incremental costs of our new labor agreements and the long-term plan we are executing includes reducing the capital intensity of the business, developing products even more efficiently, and further reducing our fixed and variable costs," said GM Chair and CEO Mary Barra.

Looking ahead for 2023, the company now expects net income attributable to stockholders to be in the range of $9.1 billion - $9.7 billion, compared to the previous outlook of $9.3 billion - $10.7 billion.

The company projects annual earnings per share to be in the $6.52 - $7.02 range, including the estimated impact of the ASR, compared to the previous outlook of $6.54-$7.54.

The company expects annual adjusted earnings per share to be in the $7.20-$7.70 range including the ASR, compared to the previous outlook of $7.15 - $8.15. Analysts polled by Thomson Reuters expect the company to report earnings of $7.45 per share for fiscal year 2023. Analysts' estimates typically exclude special items.

In connection with accelerated share repurchase program, GM noted that it will advance an aggregate of $10.0 billion to the executing banks and will immediately receive and retire $6.8 billion worth of GM's common stock.

GM has also canceled the $6.0 billion revolving credit facility it entered in October and plans to enter into a new 364-day $3.0 billion committed credit facility with the banks executing the ASR acting as lenders.

GM also expects to increase its common stock dividend by 3 cents per quarter to 12 cents beginning in 2024.

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