GM Eyes Modest Profit Growth for 2014
General Motors (GM) forecasted a slight earnings improvement for 2014, as the top U.S. automaker continues its aggressive launch plans.
The company said Wednesday it expects pretax profits to be "modestly improved" compared to 2013, with an "improved underlying operating performance more than offsetting increased restructuring expense."
GM, which expects to spend about $1.1 billion on cost-cutting measures, also called for margins similar to last year.
GM is set to pull its Chevrolet brand out of Europe and cease its Australian operations. A plant closure in Germany is also among the planned cost-cutting moves.
Rival Ford (F) also provided a cautious outlook for the current year. %VIRTUAL-article-sponsoredlinks%The company warned that its 2014 profit would likely fall below prior-year results due to costs related to vehicle launches.
GM's 2014 outlook comes as the Detroit-based car manufacturer plans to introduce 15 new or upgraded vehicles in the U.S. this year, following 18 launches in 2013. In China, GM and its joint venture partners will launch 17 models.
GM sees the global auto market growing 2 percent to 85 million vehicles in 2014.
Mary Barra, who began her tenure as GM's chief executive Wednesday, said the automaker continues to show signs of strength in the U.S. and China, which she called the two most important auto markets in the world.
"We're taking advantage of our strength in these countries to restructure and make the investments necessary to grow profitably in other parts of the world," Barra added.
On Tuesday, GM announced that it would reinstate a quarterly dividend, starting with a 30-cent payout in March.
Shares went 33 cents in reverse, checking in at $39.69 shortly after Wednesday's opening bell.