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Mayank Marwah
Mayank Marwah
Articles (502) 

What General Motors Expects of its 2018 Earnings

The company estimates capital spending of $8.5 billion this year

January 24, 2018 | About:

The leading U.S. automaker General Motors (NYSE:GM) projects its 2018 financial results to match with its estimated 2017 financial figures. As far as 2018 is concerned, strong earnings outlook sent the company’s shares up more than 3%.The Detroit-based automaker expects its 2017 earnings per share to be very close to $6.50 a share. Mary Barra, Chairman and CEO of GM, commented in a statement:

"GM had a very good 2017 as we continued to transform our company to be more focused, resilient and profitable,”. She further added: "We are positioned for another strong year in 2018 and an even better one in 2019."

Pickups and Self-driving technology to drive growth

General Motors expects its capital expenditure of approximately $8.5 billion in 2018 out of which, the company has promised to put in $1 billion in self-driving car technology. Another part of capital expenditure will go towards electric vehicles but the predetermined amount hasn’t been stated yet. Besides GM, Ford (NYSE:F) recently announced that it would invest $11 billion by 2022 in an effort to launch 40 electric vehicles that comprises 16 EVs and 24 gasoline-electric hybrids.

Recently, the company petitioned the government seeking approval to test the vehicles without steering wheel and pedals on public roads and highways from next year. The automaker plans to launch 20 EVs and fuel cell vehicles by 2023.

GM believes that it is the pickup trucks that will drive growth for the company. However, there will be several hurdles ahead of the company in respect to this. Some of these factors include the cost of launching new pickup trucks, mounting interest rates in the U.S. as well as a probable decline in overall U.S. vehicle sales.

The company can predict its bottom line in 2019 with a reasonable degree of certainty stating that rising demand for high-margin pickup trucks, assembly of SUVs, demand for the low-cost car in the international market and continued popularity of Cadillac brand would boost its income.

Last word

Come the fall, General Motors would begin production of full-size pickups such as 2019 Chevy Silverado and 2019 GMC Sierra. At the same time, the company also looks forward to re-entering production of mid-sized pickups- Class 4 and Class 5 commercial trucks, which will be unveiled in March. Pickup production will be followed by redesigned trucks and SUVs.

As a matter of fact, Cadillac is projected to offer a number of new models in 2019, which would supposedly double the brand’s profits by 2021. As of now, China is the leading market for Cadillac, comprehensively overtaking the U.S. 

(Disclosure: I do not hold any position in the stocks mentioned in this article.)

About the author:

Mayank Marwah
A seasoned writer with keen interest in the automotive, technology, telecommunication, retail and aerospace sectors.

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