Feb. 12 (Bloomberg) -- General Motors Corp. today will report a fourth-quarter loss in North America that's wider than analysts' estimates as costs such as rebates rose, two people familiar with the results said.

The world's largest automaker increased incentives to keep pace with Toyota Motor Corp. rebates on pickup trucks, said the people, who asked not to be named because the figures haven't been disclosed. GM's vehicle sales in the region fell 5 percent during the quarter.

The average analyst's estimate is for a North American pretax loss of more than $400 million, Chris Ceraso, a New York- based Credit Suisse analyst, wrote in a Jan. 31 report. He estimated GM may have lost $575 million.

The performance would set back Chief Executive Officer Rick Wagoner's plan to revive North American operations. Through the first three quarters, GM cut operating losses in North America by more than half, to $400 million, while boosting profit overseas, where the Detroit-based automaker now gets 59 percent of its unit volume.

GM doesn't provide earnings forecasts. Spokesman Randy Arickx declined to comment. The company lost $14 million in North America in the year-earlier period.

For GM's North American unit, ``higher incentive spending outweighed better than expected volume and mix,'' Ceraso wrote in his report.

Including international operations, GM is forecast to report a loss of 64 cents a share, excluding one-time costs or gains, the average of 14 analyst estimates compiled by Bloomberg. GM earned $180 million, or 32 cents a share, in the fourth quarter of 2006.

Shares Rise

GM rose $1.32, or 5.1 percent, to $27.12 yesterday in New York Stock Exchange composite trading. The shares have dropped 25 percent in the past 12 months. They have gained 9 percent this year, the most in the Dow Jones Industrial Average.

Chief Financial Officer Fritz Henderson told reporters Jan. 29 that the automaker sees more ``risk'' than ``upside'' for the next year to 18 months. He declined to discuss fourth-quarter results at the time. GM cut North American production 6 percent in the quarter, and automakers book revenue when a vehicle is built, not when it's sold.

Lehman Brothers Holdings Inc. analyst Brian Johnson also predicted in August that GM's incentive costs would be as much as $500 million higher in the second half of 2006 because of competition for light-truck sales. Toyota spent about $6,400 a vehicle on rebates for its new Tundra pickup last year, compared with about $6,000 for GM pickups, according to CNW Market Research in Bandon, Oregon, which tracks automakers' incentives.

Annual Losses

GM lost $10.4 billion in 2005 and $1.98 billion in 2006 as it ceded U.S. market share to Toyota and health-care costs rose. Wagoner, who cut $9 billion from expenses from 2005 through 2007, last year won a cost-saving contract with the United Auto Workers union that will trim another $5 billion annually by 2011.

In the meantime, GM is relying on a $30 billion cash hoard to help it pay for capital spending that exceeds $8 billion a year. Wagoner said Jan. 4 that the automaker will need more funds than it can generate this year, the third straight year of net cash drain.

---Editor: Dave Versical, Joe Winski

To contact the reporter on this story: Jeff Green in Southfield, Michigan at jgreen16@bloomberg.net

Last Updated: February 12, 2008 00:06 EST