General Motors (NYSE: GM) provided an upbeat full-year 2018 earnings guidance, which sent shares surging by 8.15% Friday morning after the opening bell. The automaker said it is expecting its fiscal 2018 earnings to exceed its previous expectations and that 2019 could be even better.
GM Chief Executive Officer Mary Barra said the Company previously expected 2018 adjusted earnings of between USD 5.80 to USD 6.20 per share and adjusted automotive free cash flow of USD 4 Billion. Barra said now the GM expects to surpass those expectations.
“From a 2018 perspective, it is not only a focus on really capitalizing on the new trucks we have out there, the light duty trucks, but also the focus on cost reduction so it was across the board. Every element of the company,” Barra told CNBC’s Phil LeBeau.
Now, GM forecasts adjusted earnings per share of between USD 6.50 to USD 7.00 and adjusted automotive free cash flow of between USD 4.5 Billion and USD 6 Billion.
Barra also told CNBC that several strategic moves will help the automaker save approximately USD 6 Billion by the end of 2020. Barra announced several plant closures and approximately 14,000 job cuts back in November.
“We have been transparent with the [United Auto Workers union], helping them and making sure they understand the business and that customers’ preferences are changing,” Barra said.
GM also plans to expand overseas and launch its vehicles in China this year, Barra said in a conference call. She mentioned that GM has 20 products waiting to launch in China.
“When you step back and look at China, we have been there for 20 years, we have had tremendous success, we have very strong brands,” she told LeBeau. “We think that the trade talks that are going on right now are very constructive, the fact they have extended this round to have even more discussion, the next is already scheduled, we know there is discussion of durable goods stimulus in country that we think will apply to autos.”
Barra said that Cadillac will become GM’s lead electric vehicle brand. The Company is projecting over 17 million U.S. sales alone in 2019 and 27 million in China. She said that China annual auto sales could climb to 30 million.