NEW YORK (CNNMoney.com) -- General Motors roared past even the most optimistic Wall Street forecasts Wednesday as it reported a large operating profit and made money from its core auto operations for the first time since 2004.

Shares of Dow component GM (up $1.39 to $32.05, Charts) were up more than 4 percent in midday trading. The stock was already the best performing Dow component year-to-date.

The nation's troubled No. 1 automaker reported a net loss of $3.2 billion, or $5.62 per share, due to charges it took to trim staff using buyouts and early retirement bonuses, as well as loss related to the pending sale of 51 percent of GMAC.

But GM (Charts) also reported income excluding special items of $1.2 billion, or $2.03 a share, compared to the loss of $231 million, or 41 cents a share on that basis in the year-earlier period.

Analysts surveyed by earnings tracker First Call had forecast EPS of 55 cents on that basis. The most optimistic forecast was for EPS of $1.11.

GM's global automotive operations earned $362 million on an adjusted basis, excluding special items, compared to a $899 million loss on that basis a year earlier.

Most of that improvement came in its core North American auto unit, which still posted a $85 million loss. But that was an improvement from the $1.1 billion loss there a year earlier. And the company said that it trimmed $1.5 billion in costs due to staff cuts and changes in health care costs, and it expects another $4.5 billion in cost savings in the third and fourth quarters.

"The lion's share of our cost reduction we expect to be in the 2nd half of this year, but we did benefit in the 2Q as well," said Chief Financial Officer Fritz Henderson in a call with investors.

Henderson said GM was pleased with the financial performance, even though he said the company is not yet satisfied with the results.

"The objective is to build a successful business, not simply break even," he said.

Profit excluding items also improved in two of its three other regions - Europe and Latin America/Africa/Middle East, while profit slipped only narrowly in Asia-Pacific. David Healy, auto analyst with Burnham Securities who had the top forecast of a $1.11 profit for the quarter for GM, said just about all the difference between his forecast and the actual result can be traced to overseas results.

"With the support of our employees, unions, dealers, suppliers and stockholders, we are moving rapidly and aggressively to address our challenges and restructure GM for future success," said a statement from GM Chairman and CEO Rick Wagoner. "It's rewarding to see our automotive business return to profitability on an operating basis and a clear sign that we're on the right track, but there is more work to be done."

The company said 34,410 employees have taken retirement or severance payments of up to $140,000 to leave the company voluntarily. The charge for those payments was $3.7 billion, or $6.47 a share. It also took a $395 million,or 70 cent a share restructuring charge and an 86 cent a share charge related to the GMAC sale.

The attrition program allowed the company to raise its cost-cutting target to an annual rate of $9 billion by the end of the year, rather than its earlier $8 billion target. But analysts had not factored a turnaround in results this quickly.

One unexpected factor helping results was that its GMAC finance unit posted record net income of $898 million, up $82 million from a year earlier, despite lower profits from its auto finance business.

That result was helped by a $259 million gain on sale of its equity investment in a regional homebuilder GMAC's residential capital unit. GM did not exclude that gain from its $2.03 a share profit excluding items, and the sale added about 46 cents a share to that result.

But much of GM's earnings surprise in its auto operations came from strong revenue and sales, despite its declining market share in its core U.S. market.

Overall revenue was $54.4 billion, up 12.2 percent.

Revenue outside of its finance unit was up 11.8 percent from a year earlier to $44.9 billion. That compares to Wall Street forecasts of $42.9 billion. The gain came on a better mix of products sold, including strong sales for its new large SUV's compared to a year earlier. The company saw the average revenue per U.S. vehicle sale rise by about $500, or 2.6 percent, to $19,852, compared to a year earlier.

Still total vehicles sold fell 7 percent worldwide to 2.4 million vehicles, with all of that due to the 17 percent drop in U.S. sales during the quarter. Sales outside the United States edged up 2.6 percent.

The company reported a profit in the first quarter when it restated some results due to accounting for changes in its health care expenses. But that profit came completely from its GMAC finance unit, with its global auto operations posting a $193 million net loss.

GM still did not give guidance for current quarter of full-year results, but it did say that it expects to continue to see improvements.

"The impact of our cost-reduction efforts on the bottom line will accelerate in the second half," said Wagoner's statement. "This, combined with building sales momentum from our new cars and trucks and improved marketing, should enable us to continue to improve year-over-year results significantly."

Before the report analysts were looking for 17 cents a share in earnings in the third quarter excluding special items. The forecast was still better than the $1.92 a share loss on that basis. The current period is when automakers traditionally see the impact of the model-year changeover.

The improved results may reduce the pressure on GM management to do some kind of combination with Nissan and Renault, the Japanese and European automakers which own stakes in one another. Nissan (Charts) Tuesday reported a 26 percent drop in quarterly earnings, disappointing forecasts.

At the urging of Kirk Kerkorian, the largest individual shareholder at GM with a 9.9 percent stake, Wagoner held talks with Carlos Ghosn, the CEO of both those automakers, on July 14 about a possible tie-up with those companies.

Henderson would not give any further details about the outlook for those talks in his comments to investors, other than to repeat the company's earlier statement that it is undergoing a 90-day review. He said it is to soon to say if GM would be open to taking a cross ownership position with the two companies if it decides to join in some kind of alliance.

"We're going to spend the next 90 days trying to understand the industrial logic, the possible synergies," he said. "Depending on where it goes we can discuss equity stakes."

After Wagoner and Ghosn met, Business Week reported that Toyota (Charts) was interested in a possible alliance with GM as a way to possibly block a GM-Nissan-Renault partnership. Both GM and Toyota have said there have been no discussions between them on a possible alliance there. But in response to a question Wednesday, Henderson said GM has not agreed to hold exclusive discussions with only Nissan and Renault at this time.

"We're just sitting down with them, our counterparts at Renault and Nissan. We don't have such formality at this point," he said.

Related: GM's long, winding road to profits.