GM board OKs new $6 billion share repurchase as the automaker gains momentum
General Motors approved another $6 billion share repurchase as the Detroit automaker continues to build momentum in 2024.
The Tuesday announcement follows a $10 billion share buyback authorization in November of last year. Shares in the Detroit automaker rose 2%, to $48.52 Tuesday while broader U.S. markets declined. GM shares are up 34% since the beginning of 2024.
GM, which announced in April that it was moving its Detroit headquarters to a new downtown office building next year, also raised its dividend to 12 cents per share from the previous 9 cents per share.
This year has proven to be a bit of a renaissance for the storied company, whose shares sunk to around $26 late last year. Excluding the pandemic swoon in spring of 2020, GM shares hadn't fallen that low in a decade.
GM turned a first-quarter profit of $2.97 billion, up 25% over the same period a year earlier, boosted by strong deliveries of pickup trucks and other higher-profit vehicles. Though U.S. vehicle sales dipped slightly early this year, the company has emphasized its focus on profitability and managing expenses. It easily beat Wall Street's sales and profit targets and raised its guidance for 2024.
GM's resurgence comes as rival U.S. automakers seem to be treading water, even as new car sales remain healthy. Ford's shares are up less than 1% this year and the company's first-quarter net income fell 24% from a year ago.
Stellantis reported a first-quarter sales decline and its shares are down almost 7% this year.
Elon Musk's Tesla reported a sharp first-quarter sales decline amid increased competition and a slowdown in electric vehicle sales. Sales fell 9% in the period, the first year-over-year quarterly sales decline in nearly four years. The drop in sales came even as the company rolled out numerous and generous price cuts to some models. Tesla shares have lost nearly a third of their value this year.