UPDATE 3-American Axle posts first quarterly profit in 2 years

* Q3 EPS 35 cents, first quarterly profit since Q3 2007

* Adjusted loss 18 cents/shr; Wall St view 38 cents loss

* Says sales to double to $3 bln by 2013

* Says successfully resolved short-term liquidity concern

* Shares down 4.6 percent (Adds share prices, analyst comparisons, comments, byline)

By Soyoung Kim

DETROIT, Oct 30 (Reuters) - American Axle & Manufacturing Holdings Inc (AXL.N) posted its first quarterly profit in two years and said cost cuts coupled with a recovery in U.S. auto sales had positioned the company for sustained profitability.

The results mark a turnaround for the auto parts supplier, which narrowly averted bankruptcy in September by negotiating amended credit agreements with lenders and winning $220 million in financial aid from its biggest customer, General Motors Co [GM.UL].

The company also joins other major suppliers including Johnson Controls (JCI.N) and Tenneco (TEN.N) in reporting improved quarterly results after sweeping cost-cutting to address the recession and steep production cuts by automakers.

"Our comprehensive multi-year restructuring is now nearly complete. This long, painful but necessary chapter in our company's historic book is substantially over," Chief Financial Officer Mike Simonte said on a conference call.

"Just to be clear we have been in the end zone before. We are not doing the shuffle over here just because we reported our first profit in eight quarters," he said. "But the toughest task, the biggest tasks are behind us."

Although the quarterly results beat Wall Street estimates, the company's shares were down 4.6 percent at $6.29 in late-morning trading on the New York Stock Exchange amid a broad sell-off in the market.

Simonte said American Axle has slashed its fixed costs by 50 percent over the past two years as a result of the restructuring, which included 4,500 job reductions.

Most auto executives say the industry had seen the trough of a punishing four-year downturn that pushed major U.S. automakers and parts suppliers into bankruptcies earlier this year. But the recovery would be slow and muted, they caution.

U.S. auto sales were down 27 percent through the first nine months of 2009 and are forecast to end the year at just above 10 million units -- down from 13.2 million units last year.

Chief Executive Dick Dauch said the company's restructuring has positioned American Axle to break even at U.S. industry auto sales of 10 million units. As the market recovers, the company expects to more than double its revenue to $3 billion by 2013, from an expected $1.4 billion to $1.5 billion this year, he said.