General Motors today said it has swung to a profit in the fourth quarter as it cut costs and saw gains in its core auto operations.
The world's largest automaker by sales posted net income of $950 million, or $1.68 per share, compared with a loss of $6.6 billion, or $11.63 per share, a year earlier. Revenue was $51.2 billion compared to $51.7 billion a year earlier. Excluding one-time items, GM earned $180 million, or 32 cents per share. Analysts, on average, had expected a profit of $1.20 per share.
GM, which had delayed its results from January, also restated net earnings going back to 2002, as it had said it would do because of accounting errors.
After the restatement, GM's fourth-quarter net income marked its first profit since the first quarter of 2006.
GM said it cut its recurring costs by $6.8 billion in 2006, about $800 million more than it had initially planned.
Chief financial officer Fritz Henderson said those savings came mostly through job cuts in its manufacturing operations, but also through some reduced spending in engineering and marketing.
GM remains on track to cut those structural costs by $9 billion this year compared with 2005, before it began a sweeping restructuring.
Henderson said GM expects an improvement in profitability and cash flow this year but declined to provide specific financial forecasts.
GM's operating cash flow, which Wall Street analysts have tracked as an indicator of the durability of its turnaround, will be negative in 2007, Henderson said.
"Everyone knew 2006 had to be a big year and it was," he told reporters after the release of the fourth-quarter earnings. "But I would say that no one at GM is declaring victory."