NEW YORK (CNNMoney.com) -- General Motors reported $3.4 billion loss in the fourth quarter of 2009, but is on track to possibly return to profitability in 2010, the company said Wednesday.
Chief Financial Officer Chris Liddell, who joined the company earlier this year, stopped short of forecasting a profit this year, but said that results in the recently-completed first quarter, which will be reported in May, and the outlook for sales the rest of the year gives the company hope that it is close to returning to the black for the first time since early 2007.
He points out that much of the fourth-quarter loss was due to one-time items, such as a $2.6 billion settlement loss related to the UAW retiree medical plan. Without those one-time items, the loss would have been closer to $600 million in the quarter.
"The underlying profitability is not as bad as it would seem," he said. "We don't need to make that much of an improvement to get to profitability."
Still, even without those one-time items, the results at GM were far worse than rivals Ford Motor (F, Fortune 500) and Toyota Motor (TM), which both reported profits in the period due to the improving auto sales.
Mike Boudreau, a director at Michigan-based turnaround firm O'Keefe & Associates, said though the loss might seem disappointing, he chalks it up to closing the books on a very difficult year of transition.
"I'm not too focused on 2009; even if they had posted a profit in the quarter, I don't know if it would have meant much," he said.
He agreed with Liddell's assessment that making money at some point in 2010 should be in reach.
"They're going to get a lift from the improvement in the U.S. economy," he said. "I don't know if they'll make money for the entire year, but I think they'll be able to break through and turn a profit for at least a couple of quarters."
The fourth-quarter loss came despite a 15% jump in the number of vehicles sold in the quarter compared to a year earlier, and a 10% cut in the number of worldwide employees. The improved sales and lower labor costs allowed it to trim its losses, though. In the fourth quarter of 2008, the pre-bankruptcy GM lost $9.6 billion.
Technically, GM's financial results were not comparable to earlier periods as they were reported under what is known as "fresh start accounting" associated with the company emerging from bankruptcy in July of last year.
The accounting process is seen as an important first step to GM's plans to put its bankruptcy behind it and once again offer shares to the public. Taxpayers own about a 60% stake in GM and will not be able to get back most of the $50 billion given to the company to see it through bankruptcy until that sale of shares.
Liddell said that a return to profitability will be the key to the timing of GM offering shares to the public. Boudreau estimated GM will probably need at least two or three profitable quarters in a row before its IPO.
"They have a shot at at doing it by the end of the year," he said.
Most of the losses continued to be concentrated in GM's home North American market, where it rang up $3.4 billion of losses, while GM Europe lost $814 million in the period. But European losses were largely offset by a $738 million profit from GM International, which represents its operations outside of North America and Europe. That led to a wordwide total loss of about $3.4 billion.
More people Googled for NPR internships than gigs at Goldman Sachs this year. More