General Motors has suspended its financial guidance for the 2020 calendar and fiscal years due to the uncertainty the COVID-19 pandemic is bringing to the business, the automaker announced in a press release.
The last time GM provided a financial outlook was in February 2020, when it announced its earnings for the fourth quarter and the 2019 calendar year. At that time, GM CFO, Dhivya Suryadevara, stated that “We expect another strong year in 2020.”
“Our relentless focus on improving our operating performance will enable us to generate strong cash flow through the cycle and invest in our future,” she added.
In February, the Detroit-based automaker provided the following outlook for 2020:
- EPS-diluted-adjusted of $5.75 to $6.25
- Auto Operating Cash Flow of $13.0B to $14.5B
- Adjusted Auto Free Cash Flow of $6.0B to $7.5B
In addition, GM also provided guidance on its two biggest markets – the United States and China. It expected the U.S. light vehicle market to be in the mid-16 million unit range, while the China retail auto industry to be in the mid-24 million unit range.
The automaker’s initial expectations for 2020 included benefits from new vehicle launches, ongoing cost savings, and lean U.S. inventory for the beginning of the year. These tailwinds would be partially offset by various macro factors.
GM’s plan also included launching several all-new models, including:
- Full-size SUVs – the 2021 Chevrolet Tahoe, 2021 Chevrolet Suburban, 2021 GMC Yukon and Yukon XL, and 2021 Cadillac Escalade and Escalade ESV
- New Cadillac sedans – the 2020 Cadillac CT5 and 2020 Cadillac CT4
- All-new small crossovers – the 2020 Buick Encore GX and 2021 Chevrolet Trailblazer
It’s unclear how the COVID-19 pandemic would impact the timeframe of these new GM vehicle launches.
GM’s decision to suspend its 2020 outlook comes on the heels of the automaker stock-piling $16 billion in cash by drawing on its available lines of credit. The $16 billion joins the automaker’s existing cash assets to support it through the tumultuous period caused by the Coronavirus epidemic.