GM's Chevy and GMC dealers took advantage of rival Ford's pickup-truck shortages in the fourth quarter, selling significantly more full-size pickups like this GMC Sierra Denali. That sales boost should have a nice impact on GM's bottom line when it reports fourth-quarter results on Wednesday. Source: General Motors Company.

General Motors (NYSE:GM) will report its fourth-quarter and full-year 2014 earnings before the market opens on Wednesday, Feb. 4. 

Wall Street analysts expect GM to report a profit of $0.83 per share for the quarter, which would represent a substantial improvement over its $0.67 result in the year-ago period

Is that a reasonable estimate? Let's see.

A big caveat in GM's optimistic guidance
Early last year, GM President Dan Ammann said the automaker's earnings before interest and taxes for 2014 would come in a bit ahead of the $8.6 billion it booked on that basis in 2013. CEO Mary Barra nudged that guidance upward a bit in June, noting that the company was running on or ahead of expectations on all of the things that went into that guidance.

But that guidance came with a big caveat: She was not including the costs of GM's massive wave of recalls. That doesn't take away from the point she was making -- that GM's underlying business has performed quite well despite the recalls -- but it's a big expense that will weigh heavily on the company's net result for 2014.

How big? About $2.3 billion in added costs in the first half of 2014, plus a $400 million charge in the second quarter to cover the anticipated cost of the fund the company established to compensate victims of accidents in some now-recalled GM vehicles made last decade. 

While there might be further recall-related costs in GM's future -- a big fine is not unlikely, and ongoing litigation could also get expensive -- there are unlikely to be significant recall-related charges in GM's fourth-quarter results. But it will be important to consider the costs paid in the first half of 2014 when evaluating the General's results for the full year.

Behind the recalls, good sales performance around the world
So what will those results, excluding the recalls, look like?

Despite its troubles, GM had a decent year in 2014. U.S. sales rose 5.3%, a bit behind the overall market's 5.9% gain -- but in some of the most profitable market segments, such as full-size pickups, GM significantly outpaced the overall market. Those gains were especially strong in the fourth quarter, as Ford faced limited supplies of pickups while it converted to its all-new 2015 F-150. Sales of GM's Chevy Silverado and GMC Sierra rose 26% in the fourth quarter.

In China, GM's sales rose 12% for the year, well ahead of the overall market's 7.5% gain. GM's massive presence in China is second only to Volkswagen's. VW earns considerably more money in China, thanks to the popularity (and profitability) of its Audi luxury brand, but GM is working to close the profit gap with new SUVs and a significantly stepped-up Chinese presence for Cadillac.

Earlier this month, Barra said GM Europe is on track to turn a profit in 2016, a big change after years of losses; however, those losses will continue for a while longer. GM Europe lost $976 million in the first three quarters of the year. Those quarterly losses should fall over the next several quarters, but the path to profitability could be bumpy.

The upshot: A solid quarter is likely, as GM continues to execute
Before interest and taxes, on what GM calls an "EBIT-adjusted" basis, the company earned $4.1 billion in the first nine months of 2014. That included the impact of a net $2 billion in special items, much of that related to the recalls.

Strong pickup sales should drive a good profit in North America, something over $2 billion, while results in GM's "International Operations" unit, which includes China, should outpace the $208 million it earned a year ago. On the other hand, a big loss in Europe is likely. And there could be another loss in South America, where economic downturns in Brazil and other key markets have hurt new-vehicle sales.

Absent any surprises, the upshot should be a net profit in the neighborhood of $1.3 billion, on an "EBIT-adjusted" result of something in the range of $2.6 billion.