General Motors (GM) announced a new $6 billion stock repurchase authorization approved by its board. This new buyback plan follows an accelerated $10 billion share repurchase program announced in November 2023, which is expected to conclude by the end of this month.
“We are very focused on the profitability of our internal combustion engine business, growing and improving the profitability of our electric vehicle (EV) business, and deploying our capital efficiently. This allows us to continue returning cash to shareholders,” stated GM CFO Paul Jacobson in a release.
The new authorization enables GM to opportunistically repurchase shares after completing the existing reauthorization. However, no specific timeframe for the completion of the program has been announced.
GM’s stock showed a 1% increase in premarket trading, closing Monday at $47.57, marking a 32.4% rise this year. The announcement of the buyback plans comes amid uncertainty surrounding the adoption of all-electric vehicles, which GM has heavily invested in, and a slowdown in customer demand for new vehicles.
Jacobson highlighted the impact of GM’s investments in its brands and product portfolio over the past few years, along with the company’s operational discipline. These factors have contributed to consistently strong revenue growth, margins, and free cash flow.
The new stock repurchase program is a strategic move by GM to enhance shareholder value by utilizing its capital efficiently. The company aims to capitalize on its profitability in both its internal combustion engine and EV businesses, ensuring a balanced approach to growth and shareholder returns.
This announcement reflects GM’s commitment to maintaining a robust financial strategy, even as the automotive industry faces challenges such as fluctuating demand and the transition to electric vehicles. By continuing to focus on profitability and efficient capital deployment, GM aims to sustain its growth momentum and provide long-term value to its shareholders.
As GM navigates the evolving automotive landscape, the new stock repurchase program underscores the company’s confidence in its strategic direction and its ability to adapt to market conditions. With a strong foundation and a clear focus on profitability, GM is well-positioned to achieve its financial goals and deliver value to its shareholders in the years to come.
READ MORE: