(Bloomberg) — General Motors Co. will boost its dividend by 33% and implement a $10 billion share buyback program in an attempt to spark interest among investors in a stock that has slumped this year as the company’s technology investments falter.
The automaker is also reinstating 2023 earnings guidance to levels modestly below what it gave before a six-week United Auto Workers strike cut into profits. GM said net income will now be between $9.1 billion and $9.7 billion, compared to the previous range of $9.3 billion to $10.7 billion. During the strike, the company withdrew guidance.
GM is spending on the new investor incentives despite high interest rates that are threatening car sales and capital burdens from its electric-vehicle effort, which has yet to show significant results. The automaker is trying to show shareholders that it can generate huge amounts of cash while still investing in technology, hoping to lift a stock that trades lower today than when Chief Executive Officer Mary Barra took over in early 2014.
“Our results, especially our cash generation, have been very strong,” Barra said in a letter to shareholders Wednesday. “I am confident in our ability to continue generating significant free cash flow as we make the EV transition.”
The automaker’s shares climbed 3.8% as of 6:30 a.m. before regular trading in New York. The stock fell 14% this year through Tuesday, compared with a 19% increase in the S&P 500 Index.