GM Says Earnings Rose 66% in 1st Quarter : Automobiles: Nation’s No. 1 car maker earns $854 million thanks to a strong market, cost cutting and increased productivity.

Boosted by a strong market, continued cost cutting and improved productivity, General Motors Corp. on Thursday reported a 66% increase in first-quarter earnings.

The nation’s No. 1 auto maker earned $854 million, or 81 cents a share, in the three months ended March 31, compared to a profit of $513 million, or 42 cents a share, in 1993’s first quarter.

The earnings would have been even better except for a $758-million charge to account for future worker disability benefits. Without the onetime charge, GM would have earned $1.6 billion for the period.

“By and large, we think it was a very satisfying quarter,” Chief Financial Officer G. Richard Wagoner said at a news conference.

While GM’s performance was better than expected by Wall Street, the company’s shares closed unchanged Thursday at $56.75 on the New York Stock Exchange.

“I was impressed, given their product mix,” said David Garrity, an analyst with McDonald & Co. Investments, a Cleveland-based brokerage.

In the first quarter, GM sold more small cars--which generate less revenue and profit--than its competitors. Its sales of trucks, including minivans and sport utility vehicles, were restrained by plant capacity limitations.

The company’s troubled North American auto operations continued to show improvement. The unit earned $511 million, excluding a $708-million charge for disability benefits. The company lost $170 million in North America in last year’s first quarter.

GM’s international auto operations earned $425 million, compared to $141 million a year ago. The performance reflects a recovery beginning in Europe and strong sales in South America, particularly in booming Brazil.

The company’s financial, computer service and electronics subsidiaries together earned $671 million. A year ago, the three units contributed profits of $624 million.

GM officials said the best indication of its improvement is in the 3.6-percentage-point increase in its gross profit margin--revenue minus costs before interest and taxes, as a percent of total sales. It moved from 14.6% a year ago to 18.2% in the first quarter.

“That’s an indication that the cost-cutting measures are working pretty good,” Wagoner said.

But he said the net profit margin in North America was only 2%, excluding the special charge. Though a big improvement from a year ago--when the operations lost money--it was below the 5% margin the company seeks worldwide and now meets in Europe.

“We are short of the superior margins we are looking for in a strong sales environment,” President and Chief Executive Jack F. Smith said.