DETROIT – General Motors Corp. (GM) reported a net profit on Wednesday of $950 million for the fourth quarter of 2006 due to cost cuts, higher automotive revenues and a gain on the sale of its finance division.
It was a turnaround from a $6.6 billion loss in the same period a year ago.
The world's biggest automaker, which is in the midst of a massive overhaul that includes shedding thousands of jobs and closing plants to become more competitive with Asian automakers like Toyota Motor Corp. (TM), wound up with a loss of $2 billion for all of 2006 compared with a restated loss of $10.4 billion in 2005.
Chief Financial Officer Fritz Henderson said despite the fourth-quarter profit, no one at GM is declaring victory over the company's financial woes.
He would say only that he expects GM's year-over-year performance to improve in 2007, and he would not predict whether the company would continue to be profitable through the year.
"The objective is to build a successful and profitable enterprise going forward," he told reporters Wednesday morning after the earnings report was released.
The fourth-quarter results included $770 million in special items attributed to the sale of a 51 percent stake in GM's financial arm, General Motors Acceptance Corp. But the Detroit company said it would have made $180 million in the quarter without the GMAC sale proceeds.
Henderson said GM's automotive operations performed better than expected for the quarter with increased revenue in North America due to higher transaction prices and higher sales volumes and revenues overseas.
The company also cut structural costs by $6.8 billion last year due mainly to buyouts and early retirement offers accepted by more than 34,000 hourly workers.
"We still expect to have negative cash flow in 2007," Henderson said.
GM's fourth-quarter profit amounted to $1.68 per share with special items and 32 cents per share excluding the items.
The results excluding items fell short of Wall Street expectations for the quarter. A dozen analysts polled by Thomson Financial predicted earnings of $1.19 per share excluding special items.