General Motors Corp., the world's largest automaker, reported a Q4 profit of $950 million on improved automotive results.
Net income rose to $1.68 a share from a loss of $6.6 billion, or $11.63, a year earlier, General Motors Corp. said in a statement released today at its Detroit headquarters. Revenue fell 1% to $51.2 billion. The quarterly profit was GM's second in two years as CEO Rick Wagoner cut spending to overcome more than $12 billion in losses in that span. The automaker had postponed a planned January 30 release until today to restate five years of earnings because of reporting errors. Among US-based automakers, GM „is the furthest along in the turnaround,” said Pete Hastings, a fixed-income analyst at Morgan Keegan & Co. in Memphis, Tennessee. „There is still a lot to be done.”
Last year's loss was $2 billion, down from an adjusted $10.4 billion in 2005, GM said today. GM's profit contrasts with the performance of Detroit-area rivals Ford Motor Co. and DaimlerChrysler AG's Chrysler unit. Ford reported a $12.7 billion loss in 2006, the worst deficit in its 103-year history, and Chrysler lost $1.5 billion. GM in January had forecast a fourth-quarter profit without giving figures. GM is cutting costs after persuading 34,300 US union workers to leave early. It's shutting 12 North American facilities by 2009 to reflect shrinking US sales and market share shed to Japanese rivals Toyota Motor Corp. and Honda Motor Co.
The restatements involved deferred tax liabilities, hedging and other items for 2002 through the Q3 of 2006 as well as results from its former finance unit. Excluding some costs, GM had a profit of $180 million, or 32 cents a share. GM increased Q4 vehicle sales in the US, its largest market, 1.1% from a year earlier to 925,460 cars and light trucks, according to Autodata Corp. Full-year sales fell 8.7% to 4.07 million. Wagoner is seeking to boost sales in emerging markets such as Russia, India and China. Since Wagoner took over GM in 2000, the automaker has risen to first place from second in 11 emerging-market countries. The automaker's shares have increased 43% in the past 12 months as the company offered workers buyouts and took other revival steps. The company's shares fell 81 cents yesterday to $30.51 in New York Stock Exchange composite trading.
The Q4 results included two months of earnings from the General Motors Acceptance Corp. financial arm. GM sold a majority stake in the unit, now known as GMAC LLC, in a transaction completed November 30. GMAC said yesterday it expects to receive $1 billion in cash this quarter from GM to maintain the finance company's value. GMAC has been affected by a declining US residential housing market. The company's Residential Capital LLC, known as ResCap, saw a decline in the value of some loans. GM's 8.357% note due July 2033 fell 1.375 cents on the dollar to 92 cents on the dollar, yielding 9.2%, according to Trace, the NASD's bond-price reporting service.
Wagoner, in an interview last week, said he isn't ready to concede that Toyota will overtake GM this year as the top-selling automaker in the world. „We've got to do a great job selling the cars and trucks we have, and we can't say what's going to happen to somebody else,” he said. „We'll have to see how it plays out, but as I said we have the capacity and we have the product to continue to be a formidable competitor.” (Bloomberg)