Aggressive cost-cutting helped General Motors to record a profit of $950m (£491.62m) in the last three months of 2006, only its second quarterly profit in two years.

GM recorded a full-year loss of $2bn for 2006, compared with $10bn in 2005. During the year it closed nine factories and cut around 30,000 jobs.

"We needed 2006 to be a big year, and it was," said Rick Wagoner, its chairman and chief executive. "Our performance last year reflects the significant progress we've made toward transforming GM into a more competitive, global business focused on long-term, sustainable success.

GM was hit by losses at its General Motors Acceptance Corporation, which has been hit by the growing scandal around sub-prime mortgages. The company recently sold its stake in GMAC. Excluding the income from this sale, it made a fourth-quarter profit of $180m.

The car-maker sold a total of 9.1m vehicles worldwide last year. As in 2005, sales outside the US outstripped domestic sales with nearly 5m vehicles sold.

Shares initially rose by 60 cents, or around 1.8%, in early trading on Wall Street, before subsiding back to around the opening price of $30.30.