GM says 2018 earnings exceeded expectations and 2019 looks even better
General Motors CEO Mary Barra said the automaker's full-year 2018 earnings exceeded its previous expectations and that 2019 is looking even better, citing strong sales in China and high demand for its truck and utility vehicles in the U.S.
"From a 2018 perspective, it is not only a focus on really capitalizing on the new trucks we have out there, the light duty trucks, but also the focus on cost reduction so it was across the board. Every element of the company," Barra told CNBC's Phil LeBeau.
The second largest U.S. automaker had previously told investors it expected 2018 adjusted earnings of between $5.80 and $6.20 a share and adjusted automotive free cash flow of $4 billion. It now expects to surpass those projections and painted an even better picture of 2019, Barra said Friday.
She forecast diluted adjusted earnings per share of between $6.50 to $7 and adjusted automotive free cash flow $4.5 billion to $6 billion for 2019.
GM's shares surged 6 percent in premarket trading on the news.
Barra also said GM tightened its belt last year, helping to boost earnings. She announced several plant closures and 14,000 job cuts in November. The reorganization is estimated to save about $6 billion by the end of 2020, with about half of those cost savings realized by the end of 2019, the company said at the time.
Barra said the job cuts were a "proactive" move in an otherwise strong labor market.
"We have been transparent with the [United Auto Workers union], helping them and making sure they understand the business and that customers' preferences are changing," she told reporters on a call Friday morning.
GM plans to expand its footprint overseas with a global family of vehicles it is set to launch in China this year, Barra said on the call. She said GM has 20 new or updated products coming out in China.
"When you step back and look at China, we have been there for 20 years, we have had tremendous success, we have very strong brands," she told LeBeau. "We think that the trade talks that are going on right now are very constructive, the fact they have extended this round to have even more discussion, the next is already scheduled, we know there is discussion of durable goods stimulus in country that we think will apply to autos."
Cadillac will become the company's lead electric vehicle brand, it said. It's projecting just over 17 million in total U.S. vehicle sales in 2019 and 27 million in China — about flat from 2018. She said annual auto sales in China will eventually climb to 30 million.
WATCH: CNBC's full interview with General Motors CEO Mary Barrashow chapters