General Motors raised its full-year guidance for 2018, saying it now expects to earn between $6.50 and $7.00 a share, well above consensus estimates of $5.88 per share. The company also said it expected to have automotive free cash flow between $4.5 billion and $6 billion in 2019.
At a presentation to investors in New York, CEO Mary Barra said GM was carrying through on its pledge to cut costs, despite threats of retaliation from President Trump and anger from unions.
“Because of the actions we have been taking for several years, General Motors enters 2019 leaner, more agile, and positioned to win,” Barra said.
In November, the company announced it was closing three plants in the United States and cutting salaried staff by 15% to reduce costs by $6 billion and invest in the next generation of electric and self-driving vehicles.
GM stock rose 9.11% to $37.90 a share at one point Friday morning.
“We are no longer investing in things that don’t make money,” President Mark Reuss said. “The future is coming fast. We are doing everything we need to do as fast as we can.”
The company said projected sales in the United States across the industry this year would approach the 2018 level of 17.3 million. It also said the automobile market in China, where it is launching 20 new or redesigned vehicles, would remain flat. The automaker said it expected to begin commercial use of self-driving vehicles in cities in the coming year, and its luxury Cadillac brand would become its lead electric vehicle brand. Last week, GM announced it was partnering with DoorDash to use self-driving cars for food delivery.
“Bottom line, we believe management just reset the bar higher for earnings and cash flow despite increased macro concerns among investors,” analyst Joseph Amaturo, of Buckingham Research Group, wrote in a client note.