General Motors posted a profit of $950 million in the fourth quarter,leaving the company with a loss of $2 billion for 2006.
In a long-delayed earnings report, GM said it made major strides in turning its operations around after a $10.4 billion loss in 2005.
Still, the loss for 2006 excluding one-time items was wider than expected and a large part of the profit in the October-December period came from special items. But CEO Rick Wagoner said the reorganization allowed the company to show an operating profit of $2.2 billion for 2006, with one-time costs excluded. "Our performance last year reflects the significant progress we've made toward transforming GM into a more competitive global business focused on long-term, sustainable success."
GM said it reduced structural costs in North America by $6.8 billion in 2006, exceeding its target of six billion, and remains "on track" to deliver the previously announced nine billion dollars of annual cost savings in 2007.
GM said its revenues for the quarter were $51.2 billion For the year revenues amounted to a record $207 billion, reflecting global sales of 9.1 million vehicles.
The loss for GM North America was narrowed in 2006 but with restructuring costs still represented a net drag on earnings of $4.6 billion. The special items for the last quarter included the sale of GM's desert proving ground property and a 51% stake in its finance arm, GMAC. GMAC had helped GM results through its lean years, but the unit, which has operations in auto finance as well as mortgages, was hurt by woes affecting the U.S. housing market. GM said it agreed to pay an extra one billion dollars to compensate for the lower value of GMAC's Residential Capital division, a mortgage finance arm involved in so-called subprime loans to borrowers with poor credit.
Copyright Agence France-Presse, 2007
