DETROIT (Reuters) - General Motors Corp. (GM.N) on Wednesday posted a larger-than-expected quarterly operating profit as it slashed costs in North America and raised its cost-cutting target by $1 billion, sending its shares up 5 percent.þþGM, the world's No. 1 automaker by sales volume, reported its net loss widened for the second quarter after writing down previously announced costs associated with buyouts for almost a third of its factory work force.þþGM said its global automotive operations, excluding charges, posted their first profit excluding charges since 2004 after cost reductions in the core U.S. market.þþThe company raised its target for cutting recurring costs in North America by $1 billion to $6 billion by the end of 2006.þþTotal revenues for the second quarter rose to $54.4 billion from $48.5 billion. Revenue from auto sales rose 11 percent to $45.2 billion from $40.4 billion.þþIn response, GM shares surged 5 percent in premarket trading to $32.17 on the Inet brokerage system.þþGM posted a second-quarter net loss of $3.2 billion, or $5.62 per share, compared with a loss of $987 million, or $1.75 per share, for the year-ago quarter.þþExcluding charges, GM posted a profit of $2.03 per share. Analysts, on average, had forecast an operating profit on that basis of 51 cents per share, according to Reuters Estimates.þþGM had not forecast its results, and analyst estimates ranged widely between 29 cents and 80 cents per share for the automaker's second-quarter earnings after excluding charges.þþThe company said it slashed the adjusted loss at its North American operations to $85 million in the quarter, excluding special items, marking an improvement of $1.1 billion from the year-earlier period, as it slashed costs, including cutting its ongoing pension expense.þþChief Executive Rick Wagoner has been under pressure to show improvement as the company studies a possible three-way proposal with Nissan Motor Co. Ltd. (7201.T) and Renault SA (RENA.PA) in which the two could buy up to a 20-percent stake in GM.þþThat deal, urged by GM's largest individual shareholder, Kirk Kerkorian, has been widely viewed as a means of prodding Wagoner to speed the automaker's turnaround efforts after a $10.6 billion loss in 2005.þþIn recent months, GM has cut 35,000 factory jobs through buyouts and early retirement offers and clinched an agreement with its major union, the United Auto Workers, that reduces the company's share of health care costs.þþGM shares, which have gained almost 60 percent since the start of the year, closed at $30.66 on Tuesday on the New York Stock Exchange on growing expectations that the automaker would report progress in its turnaround.þþThat marked the first time the stock has closed over $30 in nine months and took Kerkorian's $1.7-billion investment in GM back to profitability.þþ
Source: NY Times
