GM targets double-digit earnings growth in 2016
By Joseph White and Bernie Woodall
MILFORD, Mich. (Reuters) - General Motors Co told Wall Street on Thursday that its recovery is gathering momentum with improving margins, strong brands, new markets for high-tech vehicles, and prospects for stronger profits in coming years.
The No. 1 U.S. automaker said it is targeting an increase in earnings per share to between $5 and $5.50 per share before items, from the $4.50 per share that Wall Street analysts expect for this year. GM earned $3.05 per share in 2014 before items.
GM said it will increase its return to investors by stronger profit margins in China and North America, as well as operating efficiencies and share buybacks.
An improving U.S. economy and rapid jobs growth have put 2015 U.S. car sales on track for sales of more than 17 million. GM, the market leader, has shown a 4.2 percent increase in the U.S. market through September, which is expected to be in line with industry growth when that figure is known later on Thursday.
In an annual presentation to investors in the Detroit suburb of Milford, Michigan, GM said its pre-tax global margins target is 9 percent to 10 percent by "early next decade."
The Detroit-based automaker, which reported a 12-percent rise in U.S. September sales, has had a difficult time convincing Wall Street of its value and its shares have fallen below $30 recently, well short of its 2010 initial public offering of $33 per share.
That IPO came a little over a year after GM emerged from a government-funded bankruptcy in which the company pared four of its brands and much of its U.S. dealership network.
GM said it will have revenue of $155 billion this year as well as global margins of 6.8 percent and a 24 percent return on invested capital. Continued...