Has GM’s Recovery Hit a Snag?

Economic conditions in North America, GM’s most profitable region, also took a toll. During the fourth quarter, prices fell in the region as the company was forced to offer incentives to unload a large inventory of trucks that had stacked up on dealer lots.

Last year was only GM’s second full year as a newly public company; it made its initial public offering in the fall of 2010, after receiving a $50 billion U.S.-taxpayer bailout in 2009, and therefore, every subsequent quarter has been a chance for analysts to scrutinize the fortunes of the American auto industry and the strength of the economy in general. After all, it was the shockingly low vehicle sales in 2009 that drove GM and Chrysler into bankruptcy in the first place.

Results were weaker than analysts had predicted, but they still showed strong year-over year growth. For the three-month period, net income rose to $892 million, or 54 cents per share, from $472 million, or 28 cents a share, in the year-ago quarter. The quarter’s results were affected not so much by weakness in its business, but by charges associated with a challenging economic environment. GM’s charges included a $34.9 billion reversal of a tax reserve on U.S. and Canadian deferred tax assets, a $5.2-billion write down of assets in Europe, an associated non-cash goodwill asset impairment charge of $26.2 billion, and a $220 million write down of its investment in its French partner, Peugeot (PEUGY.PK).

Revenue rose 3 percent to $39.3 billion, surpassing both the $39.15 billion analysts had estimated for the quarter and the $38 billion the company reported in the year-ago quarter…