GM sees strong ’19 earnings, says Caddy will lead EV charge

January 11, 2019 09:18 AM UPDATED AN HOUR AGO
GM sees strong ’19 earnings, says Caddy will lead EV charge

DETROIT — General Motors expects to boost earnings this year in the aftermath of a strong 2018 that the automaker said exceeded its guidance and internal expectations.

The healthy 2019 forecast includes earnings per share of $6.50-$7 and adjusted free cash flow between $4.5 billion and $6 billion. That compares with 2018 EPS guidance of $5.80 to $6.20 — a key indicator for Wall Street — and automotive free cash flow of $4 billion, which the automaker on Friday said it expects to beat when it reports year-end results on Feb. 6.

Wall Street liked the news, pushing GM shares up 8 percent in early trading to $37.51 even as overall markets were falling.

GM’s ongoing restructuring, which includes reducing its North American salaried workforce by 15 percent and closing up to five plants, will result in cost-savings between $2 billion and $2.5 billion this year, CFO Dhivya Suryadevara said during a media briefing Friday morning.

The automaker previously said it expects the restructuring to contribute $6 billion in cash savings by 2020 — $4.5 billion in cost reductions and $1.5 billion in lower capital expenditures.

GM, which is holding an investor day later this morning in New York, did not give exact financial guidance or expected sales for 2019. It expects total U.S. industry sales — including medium- and heavy-duty trucks — to be in the low 17-million range this year. Light-vehicle sales in 2018 were 17.3 million.

Cadillac, Cruise
GM also confirmed Cadillac will lead the automaker’s global charge for EVs. The luxury brand will be the first brand to feature a vehicle on the automaker’s next-generation EV platform, which is expected to arrive in 2021. The new platform will be a major part of GM’s plans to launch at least 20 new all-electric or full cell-powered vehicles by 2023.

“Cadillac will lead that and drive that globally,” GM President Mark Reuss told media via a teleconference Friday morning.

GM also confirmed it remains on track to launch an autonomous vehicle fleet in a “dense urban environment,” expected to be San Francisco, later this year.

Dan Ammann, CEO of GM Cruise, said the company has switched its entire fleet of self-driving vehicles to Cruise’s third-generation car, which has manual controls such as a steering wheel and pedals.

A year ago, the automaker debuted the fourth-generation “Cruise AV,” an autonomous vehicle without such manual controls. However, GM needs federal approval to launch such a vehicle, which it has not received.


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