DETROIT – General Motors Corp. (GM) reported Thursday its first-quarter profit fell 90 percent compared with a year ago, citing losses in the home lending operations of its former financial arm.
It was the second consecutive quarterly profit for the nation's largest automaker which said it had record sales worldwide and improvements in its automotive operations in the latest quarter.
But the profit of $62 million, or 11 cents a share, for the January-March period was down from $602 million, or $1.06 per share, a year ago.
The company attributed the year-over-year decline to losses in the residential mortgage business of GMAC Financial Services. GM sold a 51 percent stake in GMAC to private equity investors last year.
While its North American performance improved, the company still lost $85 million on its core operations, GM said.
The company also reported $32 million of special items largely due to restructuring in its Europe and Asia Pacific divisions. It also had a one-time after-tax gain of $395 million last year due to the sale of its equity ownership of Suzuki Motors.
Excluding special items, GM's net income was $94 million, or 17 cents per share, compared with net income of $350 million, or 62 cents per share in the first quarter of 2006. Those results fell short of Wall Street expectations.
Fifteen analysts polled by Thomson Financial predicted earnings of 87 cents per share, excluding special items.
Chief Financial Officer Fritz Henderson attributed the difference primarily to a $115 million loss from GMAC, its former financial arm. He said analysts didn't try to estimate the GMAC losses, which he said would be much less in the second quarter.
GM shares fell 84 cents, or 2.6 percent, to $31.60 in premarket trading.