DETROIT (Reuters) - General Motors Co posted a weaker-than-expected fourth-quarter profit on disappointing performance in Europe and South America, but its pension shortfall was smaller than some analysts had feared.
The U.S. automaker made far more money in its home market than Wall Street expected -- the North American unit's adjusted earnings almost doubled, to $1.5 billion (952.3 million pounds) -- and its shares rose 4.25 percent in morning trading.
Analysts gave the quarter mixed reviews. GM failed to provide a detailed forecast for 2012 that some had hoped to hear.
"A lack of guidance leaves GM shares shrouded in the thick fog of macro uncertainty," Morgan Stanley analyst Adam Jonas said in a research note.
Even so, GM had forewarned about the bad news in the quarter. In Europe the company is racing to restructure Opel, and it is playing catch-up with vehicle introductions in South America.
"We obviously have work to do still and a long way to get to the objectives we ultimately want to get to," GM Chief Financial Officer Dan Ammann told reporters.
"We clearly have work to do in Europe. We have work to do in the South America business. Frankly, we have work to do all around the company in terms of cost opportunity," he added.
Ammann said GM has not gone far enough in cutting costs in its European operations, but he declined to provide a 2012 financial forecast for a unit, which the No. 1 U.S. automaker has struggled to return to profitability.
Overall, GM expects 2012 sales to top 2011's $150.3 billion, and it sees little change in its market share.
GM's 2011 profit jumped 62 percent to a record $7.6 billion. It was the company's first full year of operations since its initial public offering in the fall of 2010. GM reorganized with the help of a $50 billion U.S. government bailout and a 2009 bankruptcy.
Fourth-quarter net income attributable to common shareholders was $500 million, or 28 cents a share, compared with $500 million, or 31 cents a share, in the year-ago quarter.
Excluding one-time items, GM earned 39 cents a share, 2 cents below analysts' average forecast in a poll by Thomson Reuters I/B/E/S.
Sales rose 3 percent to $38 billion, compared with the $38.21 billion analysts had expected.
"The good news is they've done a nice job getting North America back on track; the bad news is the rest of the world," Edward Jones analyst Matt Collins said.
"In order to get the stock moving again, they really need to address international profitability and the pension," he added.
For 2012, GM expects to raise vehicle prices, including in North America, and contain cost inflation, but the sale of more cars than trucks will hurt profit margins, the company said. It also expects sales to increase from 2011 on growing industry demand.
In the fourth quarter, growing sales of cars, which offer lower profits than trucks, cut into margins, which fell to 2.9 percent from 6 percent in the third quarter.
"The big bounce was around costs in North America, more than anything else," Citi analyst Itay Michaeli said.
"The question is can you reasonably contain that as you go into the next couple of years when you launch your product? If the answer is yes, then that's clearly a key advantage."
Profit in GM's international operations, which include China, grew by a third to $400 million.
The company's Europe business saw a loss of $600 million in the quarter, including $200 million in restructuring costs. JPMorgan analyst Himanshu Patel described the results as "not a train wreck."
For the year, GM's Opel unit reported a loss of $700 million, an improvement of $1.3 billion over 2010. GM originally aimed to break even in Europe but abandoned that target in November as demand there deteriorated.
South America flipped to a loss of $200 million from a $200 million profit a year earlier.
GM said its U.S. defined pension plans earned returns of 11.1 percent last year and ended 2011 with a $13.3 billion pension funding shortfall, a smaller shortage than analysts expected.
The automaker expects returns of 6.2 percent in 2012 due to a greater shift to fixed income investments.
The company said based on the North American profit last year, it will pay profit sharing of up to $7,000 per worker to about 47,500 hourly U.S. employees.
It ended the year with total automotive liquidity of $37.5 billion, down from $38.8 billion at the end of the third quarter.
GM shares rose $1.06, or 4.25 percent, to $25.99 in morning trade on the New York Stock Exchange.
(Reporting By Ben Klayman and Deepa Seetharaman; Editing by Maureen Bavdek and John Wallace)