GM back in the black with $950-million Q4 net income

14 March 2007

Mumbai: General Motors Corporation swung back to profit with a net income of $950 million in the fourth quarter as the world's largest automaker cut costs and reaped gains in its core operations.

GM 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 rose to $51.2 billion from $51.7 billion. Excluding one-time items, GM earned $180 million, or 32 cents 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.

Chief financial officer Fritz Henderson said GM cut its recurring costs by $6.8 billion in 2006, about $800 million more than it had initially planned. He said the savings came mostly through job cuts in its manufacturing operations, and some reduced spending in engineering and marketing.

Henderson said GM is on track to cut structural costs by $9 billion and expects an improvement in profitability and cash flow this year, but declined to provide details.