General Motors on Wednesday posted fourth-quarter earnings far above analysts' expectations even as recall costs hit North American profit margins.
Excluding special items, the largest U.S. automaker earned $1.19 per share, compared with the analysts' average estimate of 83 cents, according to Thomson Reuters I/B/E/S.
Net income rose to $1.1 billion, or 66 cents a share, from $900 million, or 57 cents a share, a year earlier.
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North American profit margins for the full year were 6.5 percent. Excluding the additional costs for a record vehicle recall in 2014, the margin would have been 8.9 percent, GM said.
Shares of GM moved higher in premarket trading following the report. (Click here to track GM shares.)
The company also said it plans to raise its dividend by 20 percent, a move that comes as investors are calling on the auto giant to give them a bigger slice of the company's mounting pile of cash.
GM Chief Financial Officer Chuck Stevens said in an interview Wednesday that further return of capital to investors could happen later this year as soon as legal issues tied to the recall of a defective ignition switch linked to at least 51 deaths are resolved. He added GM prefers to carry the high end of its targeted cash range of $20 billion to $25 billion until then.
"As we get more clarity on those open items, I would expect that we would continue to evaluate further return of capital to shareholders and that could happen as soon as the second half of this year," he told Reuters.
Stevens said the planned increase, which will boost the company's annual outlay for dividends by about $400 million to $2.4 billion, was due to the strong 2014 results and stronger performance expected this year.
GM said it plans to pay 48,400 full-time UAW union workers annual bonus of up to $9,000.
GM stock has dropped roughly 3 percent in the last year, compared to a gain of about 17 percent for the .
CEO Mary Barra has faced a slew of challenges in her first year in the position.
The automotive giant is dealing with the fallout from faulty ignition switches used in some of its models.
51 deaths found eligible for compensation from GM
Falling oil prices have also pressured the automaker. Barra told CNBC last month that GM's long-term strategy was resistant to oil prices as the company had started to focus its efforts on fuel efficiency and electronic models.
"It's solving broader problems than just the cost of fuel: environmental congestion, et cetera, across the globe," Barra said.
—CNBC contributed to this report.