General Motors Co. authorized a new $6 billion share buyback plan as improving profitability in its electric vehicle operations allows the automaker to return cash to investors.
The company plans to “opportunistically” buy its stock under the new program after completing a $10 billion accelerated share repurchase approved last November, according to a statement Tuesday. GM expects to exhaust the remaining $1.1 billion of the prior plan by the end of this quarter.
“We’re growing and improving the profitability of our EV business and deploying our capital efficiently,” while also seeing improvement in the gas-power vehicle business, the company said. “This allows us to continue returning cash to shareholders.”
The decision builds on the momentum GM saw coming out of the first quarter, when strength in domestic truck and SUV sales helped it overcome challenges in China and raise its full-year profit forecast. Despite early stumbles with its EV strategy, the company has said it’s committed to the market, which continues to grow.
GM’s shares turned positive on the announcement, rising 1.1% as of 7:58 a.m. before regular trading in New York. The stock gained 32% this year through Monday’s close.
The company in January raised its quarterly dividend 33% to 12 cents a share.
GM isn’t alone — 42 other S&P 500 Index companies have announced buybacks this quarter, according to Gina Martin Adams, Bloomberg Intelligence’s chief equity strategist. Prior to GM’s announcement, BI found that S&P firms had increased buybacks by 5% from the same period a year ago to $210 billion. It was the second quarter of growth after five consecutive quarterly declines.
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