GM Forecasts Global Profits Rising ‘Modestly’ This YearTim Higgins
General Motors Co., on the verge of reporting a 12th straight quarterly profit, forecast 2013 profit rising “modestly” as it starts selling a revamped Chevrolet Silverado pickup and other new models around the world.
GM, which hadn’t given profit forecasts since before its 2009 U.S.-financed bankruptcy, said earnings before interest and taxes should rise this year. GM rose 0.9 percent to $30.60 in New York yesterday before GM issued the forecast, the highest level in 18 months.
“This is going to be a big year for us,” Chief Financial Officer Dan Ammann told analysts in a webcast briefing yesterday.
The automaker, which will replace 70 percent of its U.S. lineup in a year and a half, faces increased costs in North America related to those vehicle introductions and squeezed margins in international operations because of increased competition in China, executives said. The European industry is also expected to decrease around 4 percent, GM said.
“The second half of the year is going to be better than the first half,” said Chuck Stevens, chief financial officer for North America. “We’re going to be launching the Impala here later in Q1 then start the cadence with the new” pickups.
GM wants to increase North America’s Ebit to 10 percent eventually from 8 percent, through picking up increased sales from an improving market and also increased efficiencies from next-generation global platforms, he said.
GM last month announced a $5.5 billion deal to purchase 200 million shares from the U.S. Treasury after the automaker’s 2010 initial public offering. The government also said in December that it planned to sell its remaining 300 million GM shares within 15 months. GM probably earned 52 cents a share on an adjusted basis, the average estimate of 15 analysts surveyed by Bloomberg.