DETROIT -- General Motors on Thursday posted its sixth straight quarterly loss.
But company executives said turnaround efforts are taking root. A more favorable product mix and fewer incentives cut the size of the loss in the first quarter.
The automaker reported a net loss of $323 million in the quarter, compared with a net loss of $1.3 billion in the first quarter of 2005. Revenue rose to $52.2 billion, from $45.8 billion.
In January, GM said it would cut sticker prices and incentives, reduce low-profit sales to daily rental fleets and cut dealer margins.
"There's no huge accounting effect yet (from the pricing strategy) because we had to account for all the vehicles we still had in inventory," said Mark LaNeve, GM's vice president of vehicle sales, service and marketing, during a conference call.
GM's revenue per vehicle in the first quarter improved by $1,012 compared with the year-ago period, said CFO Fritz Henderson.
Redesigned full-sized SUVs boosted per-vehicle revenues, as did the phase-out of the Pontiac Grand Am, Chevrolet Blazer and Chevrolet Malibu Classic, he said.
"The mix of products in the first quarter was extraordinarily good," Henderson said. "We had average transaction prices up $5,000, $6,000 and $7,000" on some vehicles," he said. "Over time, those will decline."
The transaction prices will drop because as GM launches more versions of its 2007 full-sized truck line, more base vehicles will come out that offer fewer pricey options.
GM's dealer inventory in the first quarter was 74,000 units below last year's first-quarter inventory. GM's inventory is at 1.17 million units, Henderson said, adding: "We're comfortable with that."
With gasoline prices edging up to $3 a gallon, GM's optimism could be dashed if fuel costs slow sales of the redesigned full-sized SUVs.
"Are we concerned?" asked Henderson. "Yes. We're concerned all the time. So far, demand for the product is very good."
LaNeve added that GM's SUVs often offer the best gasoline mileage in their segments.
The uplevel Denali model of the GMC Yukon SUV reaches stores in the second quarter. "That will help us a lot," Henderson added.
GM common shares and bonds rose on the earnings results, which embattled CEO Rick Wagoner hailed as evidence of progress.
"I think this quarter indicates that we've taken tough measures," Wagoner told CNBC. "We've got good strategies, they're yielding the results. There is certainly more work to do, and we're driving to do that."
GM posted a $1.0 billion health care charge in the quarter. The charge reflected a deal with the UAW to cut GM's outlays on health care, which the automaker said would save it about $13 billion over six years.
The automaker posted a gain of 4.4 percent in global vehicles sales in the first quarter, but a drop of 5.2 percent in the United States.
In response to dwindling market share in its crucial home market, GM plans to cut 30,000 jobs and close a dozen plants. GM also halved its dividend in the first quarter, cutting it for the first time in more than 13 years.
GM has set a target of cutting $7.5 billion from its annual costs by the year end.
Pressure on Wagoner mounted in the first quarter as the company restated earnings due to accounting errors. But GM also took steps to advance its restructuring efforts and its board issued an unusual statement affirming its support for Wagoner.
In an effort to cut labor costs and avoid a shutdown at former subsidiary Delphi Corp., GM offered buyouts to more than 125,000 factory workers, including 13,000 workers at Delphi, which is in Chapter 11 reorganization.
Delphi remains in talks with its unions on wage and benefit cuts as it tries to emerge from bankruptcy court, and GM executives said concluding those negotiations and avoiding a strike now was a key priority for the automaker.
"We are confident we will find a solution. Work stoppage doesn't benefit anyone," said Henderson.
In order to raise cash for its restructuring and lower borrowing costs for its finance arm, GM also has agreed to sell a majority stake in General Motors Acceptance Corp. for about $14 billion to a consortium led by hedge fund Cerberus Capital Management LP.
GMAC posted earnings of $605 million in the first quarter, partly offsetting a loss of $721 million from the company's core auto operations.
GM ended the quarter with $21.6 billion in cash and equivalent assets in a defined-contribution pension fund, up from $20.4 billion at the end of 2005.
The company realized $2 billion from its sales of a stake in Suzuki Motor Corp. in the first quarter and will recognize another $300 million this quarter from the sale of a stake in another Japanese partner, Isuzu Motors Ltd.
GM's decision to halve its common stock dividend will save the company $565 million annually, the company said.
You may e-mail Jamie LaReau at [email protected]