GM looking at excellent 1st Q

General Motors Co.’s first-quarter net income should be big, but it won’t be anywhere near as large as a year earlier.

The largest U.S. automaker posted its best net income in more than a decade in the first three months of 2011 — $3.2 billion. But about half came from selling a stake in its former auto parts business.

GM is scheduled to report its earnings before the stock market opens on Thursday.

WHAT TO WATCH FOR: Industry analysts expect first-quarter net income of around $1.4 billion on strong sales in China and growth in the U.S. They expect earnings of 87 cents per share on revenue of $37.9 billion, according to a survey by FactSet.

GM is expected to get a boost from Asia. Full sales figures for the world won’t be released until Thursday, but GM has said its first-quarter sales in China rose nearly 9 percent.

Pickup sales could also be big. The company cranked up its truck factories in the first quarter to build up inventory. It will need those supplies for when it takes the plants off line in the second quarter. That downtime will allow GM to install new machinery to make revamped 2013 trucks later in the year.

The prospect of increased truck sales prompted Credit Suisse analyst Chris Ceraso to raise his GM earnings forecast by 7 cents to 84 cents per share. Auto companies generally make more money on trucks, which have higher sticker prices.

But those higher earnings would be partially offset by increasing costs and losses in Europe and South America.

There also are signs that GM’s comeback from a 2009 government-funded bankruptcy could be slowing. In the U.S., GM’s most profitable market, sales for the quarter grew just 2.7 percent, even though industry-wide sales rose more than 13 percent. GM’s U.S. market share fell from 19.4 percent last year to 17.5 percent, according to Autodata Corp.

Slow sales can be blamed on Cadillac and Buick. Cadillac sales fell almost 24 percent while Buick was down nearly 17 percent. Chevrolet sales in the U.S. rose 8 percent and GMC sales grew just over 1 percent.

GM has few new products coming early this year, a result of capital spending cuts as the company went through bankruptcy. It expects to have new pickup trucks and a host of other new vehicles for the 2013 model year.

WHY IT MATTERS: GM needed a $49.5 billion government bailout to survive in 2009. In exchange, the government got a stake in the company. Even after selling shares in an initial public offering, the U.S still needs $26.4 billion to recoup its investment. It owns 500 million shares of GM common stock. A higher GM stock price will help the U.S. get more of that money back.

Even though it has downsized, GM is a major employer. It employs 207,000 workers worldwide and 77,000 in the U.S.

LAST YEAR’S QUARTER: GM had a huge quarter. It earned a $3.2 billion profit fueled by growing U.S. and China sales. But about half came from GM selling its stake in Delphi Automotive PLC, GM’s former parts arm that was spun off in 1999. GM made $1.77 per share for the quarter on revenue of $35.9 billion.