(Reuters) - General Motors Co posted stronger-than-expected quarterly profit, driven by a recovery in the U.S. market and strong sales in Asia, but vehicle prices disappointed analysts and its shares fell 3 percent,

Quarterly net profit more than tripled from a year ago and its operating profit narrowly beat expectations.

Even though total sales rose 15 percent to $36.2 billion against analyst expectations of $35.6 billion, "all of this benefit was lost to price," Jefferies & Co analyst Peter Nesvold said.

"The pricing headwind was not a material surprise, as GM very publicly increased incentives in the first half of the quarter," the analyst said.

Prices for GM's cars and trucks fell in North America and stayed flat in Asia and Europe. They rose in South America.

Chief Financial Officer Dan Ammann said that GM recently announced a price increase on most of its vehicle lineup that went into effect earlier this week. Continued price increases may come as the year goes on, Ammann said.

"From our point of view, it's a solid quarter. It's good progress. It sets up a good foundation for the balance of the year," Ammann said.

But GM's vehicle prices were weaker than its rival Ford Motor Co, analysts said.

Morningstar analyst David Whiston called that fact "troubling."

GM shares were down 3 percent at $32.06 in Thursday morning trading. They had fallen as much as 4.7 percent at $31.50 earlier.

The U.S. automaker said it expects its full-year adjusted earnings before interest and taxes to show "solid improvement" from 2010 helped by better pricing and lower fixed costs in North America.

GM's results follow those of rival Ford Motor Co, which last week posted its best first-quarter profit in 13 years as higher prices for redesigned vehicles offset pressure from spiking commodity and oil prices.

Ammann said GM's incentives are currently running slightly below the industry average and that they will be at or slightly below the industry average for the remainder of 2011.

GM filed for bankruptcy in 2009 after being hit by the housing downturn and a spike in gasoline prices the year before that caused consumers to turn away from its high-profit trucks. In 2009, the company was saved by a $52 billion bailout funded by U.S. taxpayers.

Last November GM sold shares in an initial public offering and the U.S. government still owns 32 percent of common stock.

In addition to its strength in China, GM's sales in its home North American market remain strong. GM's sales in China for the quarter were 686,000, some 2,000 more than in North America.

Its April sales rose 26 percent and it retook the top spot it lost to Ford the prior month.

GM's net income in the first quarter rose to $3.2 billion, or $1.77 a share, compared with $900 million, or 55 cents a share, in the year earlier quarter. It was GM's fifth consecutive quarterly profit.

Excluding such one-time items as its sales of stakes in parts maker Delphi and Ally Financial, it earned 95 cents a share. That was 4 cents better than what analysts polled by Thomson Reuters I/B/E/S had expected.

Revenue rose to $36.2 billion from $31.5 billion last year. Analysts had expected $35.59 billion.

Ammann said GM is set up well to profit from higher gasoline prices with a much more diversified portfolio than three years ago when gas prices last topped $4 per gallon.

"We had a very high, robust April, 19.8 percent market share in April with the lowest incentives we've had as the new company," he told reporters.

Ammann said GM's incentives are currently running slightly below the industry average and that they will be at or slightly below the industry for the rest of the year.

GM was heavily criticized by Wall Street analysts for its lofty incentives in January and February that cut into profit per vehicle. GM cut back incentives in March and April.

GM's North American operations posted adjusted earnings in the quarter before interest and taxes of $1.3 billion, up $100 million from last year.

It expects those results to improve on average for the rest of the year as better pricing and lower fixed costs more than offset higher commodity costs and more sales of less-profitable vehicles.

GM's European unit broke even on an adjusted earnings before interest and taxes basis and is targeting break-even before restructuring charges for the entire year.

GM's liquidity at the end of the quarter rose to $36.5 billion after the sales of the Delphi and Ally stakes. Cash and marketing securities grew to $30.6 billion from $27.6 billion at the end of the fourth quarter.

The automaker said it continues to expect no material impact on full-year results from the March 11 earthquake and tsunami in Japan, but Ammann was not specific in detailing how GM would react to the shortage of Japanese-made vehicles in the coming months.

In fact, due to the struggles of Toyota Motor Corp and other Japanese automakers due to the Japan crisis, GM stands in 2011 to gain 1.1 percentage points in market share, and boost this year's profits before interest and taxes by $1 billion, UBS analyst Colin Langan said in a research note.

(Additional reporting by Deepa Seetharaman and Nick Carey in Detroit; Editing by Derek Caney, Dave Zimmerman)

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