General Motors (GM) failed to replicate its smaller rival Ford Motors in reporting a first-quarter profit, but did manage to cut losses considerably below analysts' estimates. This was due to rising sales in the growing economies of Asia and Latin America even as corresponding figures for the home market were on the decline.

Even though GM posted a net loss of $3.3 billion, or $5.74 per share, one-time losses of $1.45 billion from financing arm GMAC and $731 million in bankruptcy support for auto parts manufacturer Delphi must temper this result.

Leaving these asides, the figures were more respectable at a loss of $350 million, or 62 cents per share. This is GM's third straight quarterly deficit and compares with a profit of $62 million, or 11 cents, for the same period last year. Analysts had predicted a deeper loss of about $1.60 per share. Sales fell 1.6 per cent to $42.7 billion, but they topped analysts' forecasts of $40.8 billion.

In contrast, Ford had posted profits of $100 million only last week, and Toyota motors announced that it had beaten GM to become the world's leading car company in terms of total units sold globally. (See: Ford confounds analysts, posts $100 million profit in first quarter)

General Motors  also suffered a 10 per cent fall in the US sales, even as Toyota sold 2.41 million vehicles during the first three months of the year, an increase of 2.7 per cent as compared to GM, who sold 2.25 million vehicles over the period, which is 1 per cent lower than in  the previous year.(See: Toyota overtakes GM in Q1 2008 auto sales) 

Due to the better-than-expected results even after the losses, price of GM shares rose by 4.3 per cent in pre-market trading. The stock had lost close to 15 per cent of its value this year.

Rising revenue overseas helped CEO Rick Wagoner blunt the impact of a mounting loss in North America, where GM was hurt by a supplier strike, a slowing US economy and mortgage losses at the partly owned GMAC LLC finance unit.

Though GM sold 51 per cent of GMAC to a group led by Cerberus Capital Management LP in November 2006, large losses from the automaker's former finance wing continue to weigh on the company. GMAC announced last week that it lost $589 million during the first quarter, though results began to improve slightly in its ailing mortgage loan unit, still reeling from the sub-prime home loan fallout.

GM has been unable to complete a plan to bring Delphi, the auto-parts maker GM spun off in 1999, out of bankruptcy. The automaker has spent $7.5 billion to support Delphi since its October 2005 filing for Chapter 11 protection. A long thought out rescue deal was also recently torpedoed. (See: Delphi rescue deal in dock as Appaloosa pulls out)

GM had an $812 million pretax loss in North America, wider than the $208 million deficit a year earlier, in part because of an $800 million expense from a strike at American Axle & Manufacturing Holdings Inc. The two-month strike has idled all or part of as many as 31 GM plants. GM and other automakers report revenue when a model is shipped from the factory, not when it is sold at the dealer, so lost production means lost revenue. (See: UAW strike at American Axles shuts GM plant in Detroit)

The difficult American sales environment led GM to join other US automakers and forecasters in slashing their 2008 North American industry wide auto sales target to a seasonally adjusted rate of 15 million, down from an earlier estimate of 16 million. If the American auto industry only sells 15 million cars this year, it will be the poorest showing since 1995.

Additionally, GM also announced the elimination of one shift at four of its North American pickup truck and large SUV factories, resulting in about 3,500 job cuts.

In a turnaround, the automaker boosted profits by several multiples in each of its other three regions. GM's European profit grew by more than 18 times to $75 million. The Asia-Pacific region and Latin America-Africa-Middle East region doubled earnings to $286 million and $517 million, respectively. Amazingly, GM had a record 64 per cent of its vehicles sales from outside the US.