TLDR
- GM announced a new $6 billion share buyback program and 25% dividend increase
- Shares rose 4.8% in premarket trading following the announcement
- The company will repurchase $2 billion in shares by first half of 2025
- GM completed previous buyback programs, reducing share count below 1 billion
- GM expects EV losses to narrow by $2 billion this year
General Motors (GM) announced on Wednesday a new $6 billion share repurchase program and a 25% increase in its quarterly dividend, sending shares of the Detroit automaker up roughly 4.8% in premarket trading.
The company plans to repurchase $2 billion of shares by the first half of 2025 through an accelerated share repurchase (ASR) agreement with Barclays and J.P. Morgan. The remainder will be bought at the company’s discretion, according to a company statement.
GM will also increase its quarterly dividend from 12 cents to 15 cents per share starting with its next planned dividend payment in April 2025. This represents a 25% boost for shareholders.
The latest capital return plan follows GM’s completion of a previous $10 billion share buyback program announced in November 2023. During the fourth quarter, GM completed that program and repurchased 87 million shares on the open market, reducing its outstanding share count to 995 million shares.
This achievement marked an important milestone for the company, which had set a goal of reducing its share count to below 1 billion. In June 2024, GM had approved another $6 billion share 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,” GM Chief Financial Officer Paul Jacobson said during the company’s fourth-quarter earnings call last month.
Current electric vehicles are not yet profitable
The automaker is working to balance shareholder returns with maintaining a strong balance sheet and investing in its business as it continues to expand its electric vehicle lineup. GM has acknowledged that its current electric vehicles are not yet profitable, but the company expects EV operating losses to narrow by $2 billion this year from undisclosed levels.
For the full year 2025, GM projects net income between $11.2 billion and $12.5 billion. Analysts tracked by LSEG are forecasting net income of approximately $11.45 billion.
Capital spending for 2025 is expected to range between $10 billion and $11 billion as the company continues to invest in its future product lineup and manufacturing capabilities.
The automaker’s board approved these financial strategies as part of GM’s broader capital allocation plan to reinvest in business growth while maintaining strong returns for shareholders. The ASR program is expected to conclude by the second quarter of 2025, with the final number of shares repurchased based on average stock prices during the program’s term.
GM shares have risen approximately 18% over the past year, performing roughly in line with the broader S&P 500 index. The stock closed at $46.71 on February 25, 2025, and was trading at $48.68 in pre-market trading following the announcement.
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