By Kalea Hall

DETROIT (Reuters) -General Motors said on Wednesday it would increase its quarterly dividend by 25% and undertake a new $6-billion share buyback program. 

Shares of the automaker rose about 6% in morning trading. 

The U.S. automaker said it expected to repurchase $2 billion of shares by the first half of this year, with the remainder to be bought at any point of the company's choosing. 

The quarterly dividend increase from 12 cents to 15 cents a share will take effect with the company's next planned dividend in April 2025, it said.

"GM wants to show a lot of conviction to the market that they believe in the future of the company, regardless of things like cyclicality" or fears of the effects from tariff threats made by the Trump administration, said David Whiston, analyst for Morningstar, in an email.

 "The dividend increase further shows confidence and suggests regular annual increases early each year are possible since they’ve done that in early 2024 and 2025," he said. 

GM had announced a dividend increase and a $10-billion share buyback program in November 2023.

The automaker said in the fourth quarter it completed that buyback program and also repurchased 87 million shares in the open market. At the end of the quarter, GM had an outstanding share count of 995 million, hitting its goal of reducing the share count to less than 1 billion shares. 

GM in June 2024 approved another $6-billion share buyback, of which $300 million is outstanding. 

"Moving forward, we expect to continue returning excess capital to our shareholders and further reducing the share count," Chief Financial Officer Paul Jacobson said on GM's fourth-quarter earnings call last month. 

The automaker is balancing returning value to shareholders with maintaining a strong balance sheet and investing in the business as it adds more electric vehicles to its lineup that are not yet profitable.

GM expects EV operating losses will narrow this year by $2 billion from undisclosed levels. 

GM has projected net income of $11.2 billion to $12.5 billion for 2025. Analysts are projecting net income of $11.45 billion, as calculated by LSEG. 

The company expects its 2025 capital spending to be in the range of $10 billion to $11 billion. 

GM shares have risen about 18% over the last year, roughly in line with the broad-market S&P 500 index.

(Reporting by Kalea Hall in Detroit; Editing by Jamie Freed and Rod Nickel)