General Motors Co posted fourth-quarter results that topped Wall Street expectations, but its shares dipped below its IPO price as investor concerns shifted to the pressure ahead from rising oil prices and other costs.

GM posted a profit of $4.7 billion for all of 2010, its first full year after a landmark bankruptcy that scoured costs and debt from its balance sheet.

That marked the automaker's first full-year profit since 2004 and its largest profit since 1999, when it earned $6 billion on booming sales of trucks and SUVs.

Analysts said the results showed GM's success in completing a turnaround funded by the U.S. government even as investor attention shifts to a range of new risks, including higher oil prices.

The story is changing for them and shifting away from the trauma and pain of 2008 and 2009 and to 'How do they compete in a very competitive marketplace?' said Bernie McGinn, chief investment officer at McGinn Investment Management.

Shares of GM dropped as much as 5.3 percent on Thursday to $32.75, below the $33 level at which they went public last November. The stock recovered somewhat by late morning but was still down 2.4 percent at $33.77.

Josef Schuster, founder of IPOX Schuster LLC and a fund manager specializing in IPOs, said GM shares were under pressure from selling by investors as the stock price approached the $33 IPO price.

The prospect of secondary share sales by the U.S. Treasury in the months ahead and the risk from higher oil prices have also added to the pressure on the stock despite the stronger fourth-quarter result, he said.

There's a risk that higher oil prices could derail the U.S. economic recovery, said Schuster, whose funds hold GM shares. I think GM will probably underperform here for a while.

GM's fourth-quarter net income of $510 million represented a slowdown from the previous three quarters, but topped analyst expectations after adjusting a one-time charge to buy back preferred shares held by the U.S. Treasury.

Revenue rose nearly 15 percent from a year earlier to $37 billion.

GM: ACCOUNTING PROBLEMS FIXED

Separately, GM said the audit committee of its board had determined the company's financial reporting procedures under Chief Financial Officer Chris Liddell had been strengthened and no longer represented a risk it would have to flag for investors.

GM also said it would pay more than $200 million in bonuses to hourly workers, including payouts of about $4,300 for each of its roughly 45,000 U.S. factory workers represented by the United Auto Workers union.

Liddell said he expected the current quarter would represent a strong start to 2011 and said the fourth quarter had been slightly ahead of the automaker's internal projections.

From our point of view it was a very good result, he told reporters.

GM management, led by Chief Executive Daniel Akerson, warned in a January meeting with analysts that fourth-quarter earnings would be below the rate for the first three quarters of the year.

Fourth-quarter net income was $510 million, or 31 cents per share. Earnings for the first three quarters of 2010 totaled $4.2 billion.

After adjusting for a one-time charge for buying back preferred shares held by the U.S. Treasury, fourth-quarter earnings per share were 52 cents, at the high end of Wall Street expectations.

GM's European operations posted a loss of $568 million for the fourth quarter and a loss of $1.7 billion for the year. The automaker has said it hopes the unit -- known for its Opel brand -- will break even this year.

CASH ON HAND

GM ended 2010 with nearly $28 billion in cash and about $5 billion on an undrawn credit facility. Its U.S. pension plans were underfunded by about $12 billion, Liddell said.

The Detroit-based automaker suspended some of its vehicle development efforts as it tried to conserve cash in the run-up to bankruptcy. It faces higher costs now to revive those programs, including efforts to broaden its offering of electric cars beyond the just-released Chevrolet Volt.

GM, which had a record-setting $23 billion initial public offering of stock in November, has been seen by investors and analysts as a bet on the continuing recovery in the U.S. auto industry and fast growth in markets led by China.

The U.S. auto sector is still widely seen as being in the early stages of a recovery from its near-collapse in 2008 and the U.S. government-funded bankruptcy of GM in 2009.

For GM to keep the U.S. Treasury from losing on its $52 billion bailout, the remaining 33 percent U.S. government stake in the company would have to be sold at about $53 a share.

Liddell wooed fund managers during GM's IPO road show with a promise that the automaker would never again become a $100 billion pension plan with a small company attached.

As part of Liddell's effort to develop a fortress balance sheet, GM contributed $4 billion in cash to its U.S. pension plans in December and added another $2 billion in common stock in January.

From 2005 to 2009, GM lost about $88 billion in its slide to bankruptcy as it struggled to shed costs in the U.S. market.

(Reporting by Kevin Krolicki; editing by John Wallace and Matthew Lewis)

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