provided another piece of the 2008 recession puzzle on Tuesday, reporting a fourth-quarter loss due to further deterioration in its U.S. auto business.
The automaker also said it reached an agreement with the United Auto Workers union to offer buyout packages to all union-represented employees and replace them with lower-wage workers.
GM reported a loss for the quarter of $722 million, or $1.28 a share, compared with earnings of $950 million, or $1.68 a share, in the year-earlier period.
Excluding restructuring charges and a gain from its sale of Allison Transmission, GM said its fourth-quarter adjusted profit was $46 million, or 8 cents a share, compared with the prior year's adjusted profit of $180 million, or 32 cents a share.
Analysts on Wall Street were expecting an adjusted loss of 54 cents a share, based on Thomson First Call's average estimate.
That said, Bear Stearns analyst Peter Nesvold said in a note to clients that GM's adjusted profit included a tax benefit of $1.6 billion, or $2.83 a share, which suggests that its operating results missed expectations.
On its top line, GM reported revenue of $46.7 billion, up about $3 billion from last year. That beat expectations on Wall Street for revenue of $44.4 billion.
After opening lower, shares of GM recently reversed course, trading up 28 cents, or 1%, to $27.40 amid a broader rally in the stock market. GM's stock leads the
Dow Jones Industrial Average
this year, up 11% so far in 2008.
The company's fourth-quarter pain came in North America, where GM posted an adjusted loss before taxes of $1.1 billion, widened from an adjusted loss before tax of $129 million in the prior year's period.
The widening deficit in its North America operations came as the U.S. has been pummeled by a consumer spending slowdown spurred by a downturn in the residential housing market, leading to widespread fears of economic recession.
This slowdown has hit GM as it grapples with an already weak position in its North American operations. The company has been working over the past two years to restructure its operations at home amid heightened competition from foreign automakers and rising oil prices that have sapped demand for its big vehicles.
GM was profitable at all its auto operations overseas.
"Despite progress and buoyant markets outside the U.S., falling volumes and competitive pressures in the U.S. will continue to pressure GM in North America,'' said Lehman Brothers analyst Brian Johnson in a note to clients.
GM also recorded a $394 million loss in the quarter related to its 49% stake in its financing arm, GMAC. The financial-services company, now majority owned by private-equity firm Cerberus Capital Management, reported a fourth-quarter loss of $724 million due largely to ongoing losses at its mortgage unit, Residential Capital.
For all of 2007, GM reported a record loss of $38.73 billion, or $68.45 a share, compared with a loss of $2 billion, or $3.50 a share, in 2006. The magnitude of 2007 losses was largely due to the third-quarter noncash charge of $38.6 billion GM took to write down deferred-tax-credits.
"We're pleased with the positive improvement trend in our automotive results, especially given the challenging conditions in important markets like the U.S. and Germany, but we have more work to do to achieve acceptable profitability and positive cash flow," GM CEO Rick Wagoner said in a statement.
GM said it expects improved pretax automotive earnings in 2008, driven by a stronger performance in emerging markets amid ongoing U.S. uncertainty.