Feb. 12 (Bloomberg) -- General Motors Corp., the world's largest automaker, posted a fourth-quarter loss on shrinking sales in North America while overseas revenue rose.

GM reported a loss of $722 million, or $1.28 a share, after a year-earlier net income of $950 million, or $1.68. The Detroit- based company had a profit after excluding one-time items, and automotive revenue rose 7 percent to $46.7 billion, helped by gains in China and Brazil.

The results suggest Chief Executive Officer Rick Wagoner is delivering on his goal to lift overseas sales while cutting expenses at home. He said he'll offer buyouts to speed the hiring of lower-paid new workers in the U.S., where industrywide sales are projected to fall to a 10-year low in 2008.

``Wagoner is doing the right things; he's just doing them at a time when the economy might be masking some of the favorable benefits,'' said Pete Hastings, a Morgan Keegan & Co. fixed- income analyst in Memphis, Tennessee. Buyouts for up to 74,000 United Auto Workers members would be ``money well spent,'' he said.

Not counting costs and gains the company considers one-time, GM reported an adjusted profit of $46 million, or 8 cents a share. On that basis, analysts estimated a loss of 64 cents. In North America, GM lost $1.1 billion, excluding some costs, compared with analysts' expectations of a $400 million loss on that measure.

Contrast

The automaker's forecast of rising sales outside its home market contrasted with analysts' forecasts of earnings ``pressure'' in North America as consumers rein in spending. ``We remain comfortable with our expectation of a large operating loss in North America in 2008,'' said Lehman Brothers analyst Brian Johnson in a note today.

GM lost 52 cents, or 1.9 percent, to $26.60 at 4:01 p.m. in New York Stock Exchange composite trading, after rising as much as 2.6 percent earlier. The shares have advanced 6.9 percent this year, leading the Dow Jones Industrial Average with DuPont Co.

The adjusted profit stemmed mostly from a $1.6 billion tax benefit, Chief Financial Officer Fritz Henderson said. The tax gain came from the sale of the Allison transmission unit and a $7.7 billion reduction in GM's overall pension and retiree health-care liabilities, he said.

``It was a tough quarter in North America,'' Henderson told reporters today in Detroit. ``Volumes were down, and there was tougher pricing because we had a full incentive load for our pickups.''

2007 Loss

The full-year deficit was a record $38.7 billion and included a $39 billion expense in the third quarter related to a tax-accounting change. In 2006, GM lost $1.98 billion, or $3.50 a share, bringing the automaker's losses in the three years since it last turned an annual profit to more than $51 billion.

The third quarter included the $1.6 billion tax benefit and $768 million in one-time expenses.

GM had $27.3 billion in cash, readily available assets and funds from a retirement fund at the end of December, a decline from $30 billion at the end of September. The automaker ended 2007 with a negative adjusted automotive cash flow of $2.4 billion, a $2 billion improvement from 2006.

``Where they will get growth obviously is overseas, but this is a mature market in the United States and Europe,'' and they need to maintain market share there, said Mirko Mikelic, portfolio manager at Fifth Third Asset Management in Grand Rapids, Michigan.

In its regions outside North America and Europe, GM tallied $496 million in profits. Europe reported a fourth-quarter deficit of $445 million.

`Weak Germany'

Sales of GM's Opel Vectra sedan aren't meeting expectations in Europe, GM said today. ``In Europe, we didn't have a great quarter; that's a lot about a relatively weak Germany,'' said Wagoner in an interview on Bloomberg Television.

``In total, our automotive earnings globally should continue to improve,'' in 2008, said Wagoner. New products, such as the Cadillac CTS sedan, may help GM lift its U.S. market share.

The automaker today announced details of a buyout plan for its remaining 74,000 UAW employees in the U.S. The offers would provide payments of as much as $62,500 for the most-skilled workers with at least 30 years service.

UAW members with 10 or more years service can also opt for a one-time payment of $140,000 to leave the company and forgo future benefits. Workers with less than 10 years may take a $70,000 buyout.

GMAC

GMAC LLC, the auto and home lending company that's 49 percent owned by GM, posted a $724 million fourth-quarter loss last week as more than one of every 10 homeowners fell behind on their mortgage payments. GM reported a $394 million pretax loss related to GMAC in the fourth quarter and an $872 million deficit for the full year.

Wagoner, who cut $9 billion from expenses from 2005 through 2007, last year won a cost-saving contract with the UAW that will trim another $5 billion annually by 2011.

Henderson told reporters on Jan. 29 that the automaker sees more ``risk'' than ``upside'' in the U.S. economy for at least the next year. GM cut North American production 6 percent in the quarter.

``It's going to be difficult for GM to make a profit in 2008 in spite of all the restructuring they've already done,'' said Bradley Rubin, an analyst at BNP Paribas in New York.

Analysts project U.S. auto sales may fall to 15.5 million this year, around 8 percent below the annual average this decade. The U.S. automaker fended off a surging Toyota Motor Corp. last year to kept its 77-year reign as the world's largest automaker by a margin of about 3,000 cars and trucks.

GM's 8.375 percent note due July 2033 rose 0.5 cent to 81 cents on the dollar, yielding 10.53 percent, according to Trace, the NASD's bond-price reporting service.

Credit-default swaps on GM debt rose 10 basis points today to 902 basis points, according to CMA Datavision in New York. The contracts are designed to protect bondholders against default. A rise in the price indicates a decrease in the perception of a company's credit quality.

To contact the reporters on this story: Jeff Green in Southfield, Michigan at jgreen16@bloomberg.net; Greg Bensinger in New York at gbensinger1@bloomberg.net.

Last Updated: February 12, 2008 17:33 EST