General Motors shares rise after it raises profit outlook

General Motors (GM) shares have risen after the firm said it would be more profitable and return more money to shareholders.

Shares in the biggest US carmaker closed 0.6% up after it raised its 2016 earnings forecast by 25 cents to between $5.25 and $5.75 per share.

GM also plans to raise its stock buyback programme by 80% to $9bn and extend it to the end of 2017.

In total, it plans to give $16bn back to shareholders by the end of 2017.

GM executive Mary Barra said: “We made significant progress executing our strategic plan and the results are being demonstrated through our improved earnings.”

Ford disappoints

Shares in rival car maker Ford fell more than 3.5% after it said US margins could hit a plateau of 9.5%.

Ford said on Tuesday it would give a special $1bn dividend, and that it expects pre-tax profit of between $10bn and $11bn in 2015.

But this figure was at the lower end of analyst expectations.

“Their guidance is in line or below what was expected,” said Matthew Stover of Susquehanna Financial.