GM Zooms Past Forecasts

Updated from 12:36 p.m. EDT

General Motors (GM Quote) won back fans on Wall Street Tuesday with second-quarter profits that trounced expectations.

Shares of the automaker recently were up 70 cents, or 2.2%, to $33.31, providing a modest lift after the stock was pummeled in last week's market selloff amid credit worries.

The company managed to swing to a profit despite more declines in revenue. While its key North American division recorded more bottom-line losses, the business turned out a surprise profit when one-time charges were excluded.

"This was a very good quarter overall, and it shows that GM continues to make progress in improving itself," says E.K. Riley Investments analyst Robert Toomey, who has long been bullish on GM. "There is some short-term risk in the back half of this year due to high inventory levels. GM is resorting to heavy promotional measures to move products and the competitive landscape in North America remains vicious, but over the long-term, GM is a very attractive turnaround candidate at this point."

GM reported net income for the quarter of $891 million, or $1.56 a share, reversing a year-earlier loss of $3.4 billion, or $5.98 a share.

Excluding charges related to its restructuring, the automaker said it earned $2.48 a share, easily topping Wall Street's target of $1.13 a share, according to Thomson First Call.