LITTLE ROCK — General Motors Co., the largest U.S. automaker, reported fourth-quarter net income Thursday of $510 million, completing its most profitable year since 1999.
GM’s net income totaled $4.7 billion last year,fueled by strong sales in China and the U.S. as the global auto market began to recover. It earned $2.89 per share on revenue of $135.6 billion.
It was the company’s best performance since earning $6 billion in 1999 during the height of the sales boom for pickups and sport utility vehicles.
The performance, while beating Wall Street expectations, didn’t help GM’s stock price, which fell 4.5 percent Thursday to close at $33.02, just above November’s initial-public-offering price of $33 per share.
“Both Ford and GM [shares] went south, so it tells me it isn’t something coming from earnings,” said David Whiston, an equity analyst with Morningstar Inc. in Chicago. “The market may be getting jittery about gasoline prices and a shift in sales mix.”
Ford shares slid 16 cents, or 1.1 percent, to close Thursday at $14.70.
GM’s full-year profit is remarkable, analysts said, considering that from 2004 through 2009, GM was in a state of perpetual restructuring, trying to downsize its work force and shrink factory capacity to match falling demand for its vehicles.
The company lost more than $80 billion during the period and almost ran out of cash in 2008, when the government began a bailout that eventually reached $49.5 billion.
With government financing, GM went into bankruptcy protection in June 2009, leaving a quick 40 days later, cleansed of debt and labor costs.
It lost $4.4 billion in the second half of 2009, but began making money as auto sales started to recover last year.
It posted $4.2 billion in profits during the first nine months, helped by its lower costs and new models such as the Chevrolet Equinox - a small SUV that seats five.
It touted the profits to persuade investors to buy stock in the revamped company. It then returned to the stock market in its initial public offering in November.
“Last year was one of foundation-building,” Chairman and Chief Executive Officer Dan Akerson said Thursday. GM showed it could turn profits consistently - for four straight quarters in 2010 - even though demand for cars still remained relatively low.
“This is a good start. There is a lot more work to do; 2010 was clearly a good year for General Motors,” Akerson said.
“We need to continue to develop and launch great products for our customers around the world. ... We must strengthen our position in emerging markets like China and Brazil. ... We will continue to push hard on technology.”
GM’s market share has stabilized without having added a lot of new products, said Mark Vincent, senior vice president of U.S. Equities for Standard Life Investments in Boston, which oversees $230 billion, including GM shares.
“The secret to marketshare stabilizing has been customers starting to believe GM is back,” Vincent said.
GM’s fourth-quarter income of 31 cents per share was its lowest quarterly profit of the year, but still far better than the $3.5 billion it lost inthe same period in 2009.
The net income included $400 million in charges for paying preferred-stock dividends and buying preferred shares from the U.S. government. Without the charges, the company earned 52 cents, beating Wall Street’s estimates. Analysts polled by FactSet expected 49 cents per share.
Revenue for the quarter totaled $36.9 billion, also beating analysts’ estimates of $34.3 billion.
This year will be one of transition for GM, which has only a few new vehicles to debut, said Citigroup Global Markets analyst Itay Michaeli. In the U.S., sales generally wane as models grow older.
The company, he said, had a market share of just more than 20 percent in the last quarter of the year, and that rose to 21.8 percent in January as GM increased incentives such as rebates and low-interest loans.
Michaeli said his surveys show that GM’s market share in February should run above analysts’ expectations, a sign that GM has enough momentum to carry it through the year with its current model lineup.
“Hopefully they’ll continue to run at a higher market share without having to use more incentives,” he said.
GM Chief Financial Officer Chris Liddell said the company’s U.S. incentives dropped $800 per vehicle in the fourth quarter from the same period of 2009. But GM increased them by $400 from December to January as the company saw a chance to gain sales, he said.
Information for this article was contributed by Tom Krisher of The Associated Press, by Craig Trudell and David Welch of Bloomberg News and by Jerry Hirsch of the Los Angeles Times.
Front Section, Pages 1 on 02/25/2011