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.
