General Motors (NYSE: GM) shares soared more than 4% in premarket trading Wednesday after the U.S. automaker revealed plans to boost its quarterly dividend by 25% and launch a new $6 billion share buyback program. The moves aim to return excess cash to investors and enhance shareholder value.
The company detailed that it will repurchase $2 billion worth of shares by the first half of 2025, with the remaining $4 billion to follow at its discretion. Additionally, GM will increase its quarterly dividend from 12 cents to 15 cents per share, with the new rate taking effect for the next scheduled payout in April 2025.
This isn’t GM’s first rodeo with shareholder rewards. In November 2023, the company rolled out a $10 billion share buyback program and paired it with a dividend increase. The automaker wrapped up that buyback in Q4 2023, scooping up 87 million shares through open market purchases. That effort trimmed its outstanding share count to 995 million, meeting a self-imposed goal of dipping below 1 billion shares.
In June 2024, General Motors (NYSE: GM) approved another $6 billion buyback, of which $300 million remains outstanding.
“Moving forward, we expect to continue returning excess capital to our shareholders and further reducing the share count,” Chief Financial Officer Paul Jacobson said during the company’s fourth-quarter earnings call last month. Jacobson emphasized that GM is striking a balance: rewarding investors while maintaining a strong balance sheet and investing heavily in its business.
A big piece of that investment focuses on electric vehicles (EVs), a segment GM is expanding despite current losses. The automaker said it anticipates EV operating losses will narrow by $2 billion in 2025, though it didn’t specify the current loss figures. As GM pushes more EVs into its lineup, profitability in this area remains a work in progress.
For the full year, General Motors (NYSE: GM) forecasts net income to land between $11.2 billion and $12.5 billion, a range that tracks closely with the $11.45 billion analysts expect, based on LSEG calculations.
The U.S. automaker expects its 2025 capital spending to hover between $10 billion and $11 billion.
