GM Approves Fresh $6 Billion Stock Buyback As It Forecloses $10 Billion Plan
... Returns Over $16 Billion To Shareholders In Couple Of Years
General Motors has announced that a new $6 billion stock buyback has been approved by its board, saying the move comes as the Detroit automaker prepares to close an accelerated $10 billion stock repurchase this month.
The buyback, which was announced in November 2023 on the heels of the ratification of its agreement with union autoworkers, was previously expected to close in the last three months of 2024.
In a statement, GM’ s Chief Financial Officer (CFO), Paul Jacobson, said: “We are very focused on the profitability of our (internal combustion engine) business, we’re growing and improving the profitability of our (electric vehicle) business and deploying our capital efficiently. This allows us to continue returning cash to shareholders.”
The new authorization will allow GM to continue to repurchase shares after its existing plan closes. The company did not announce an approximate timeframe for the completion of the $6 billion buyback.
GM’s stock nudged higher at over one percent in pre-market trading on Tuesday, June 11, 2024, while its shares have increased by 32 percent this year.
Between 2022 and the first half of 2024, GM’s share repurchases have reached a total of $15 billion. Also on Tuesday, RBC Capital Markets analyst, Tom Narayan, said that when combined with dividends over the period, it amounts to about $16.1 billion in total returns, an equivalent of 30 percent of the auto maker’s total market capitalization.
“The new authorization provides evidence that GM is committed to continuing to return capital to shareholders and that 2023 was not a one-off,” Narayan added.
The move builds on GM’s strong first quarter which saw its earnings per share rise by 18.5 percent and revenue climb almost 8 percent to $43 billion. The automaker also raised its forecast for full-year adjusted earnings to between $12.5 billion and $14.5 billion.
