GM Revises 1st-Quarter Results, Posts a Profit

General Motors Corp., the world’s largest automaker, revised its first-quarter results to reflect a change in accounting, resulting in its first profit in six quarters.

Net income was $445 million, or 78 cents a share, rather than a loss of $323 million, or 57 cents, GM said in a statement. The company revised its results after the Securities and Exchange Commission ruled that the costs of funding a $3-billion healthcare fund and other expenses could be spread over seven years, starting in the third quarter.

The modification affects when GM will account for the healthcare expense and doesn’t change the company’s underlying financial condition. Chief Executive Rick Wagoner is betting on new models to revive sales and profit after a $10.6-billion loss last year.

“The SEC backed off,” said David Healy, an analyst at Burnham Securities in Sierra Vista, Ariz., who owns General Motors Acceptance Corp. debt. “GM won.”

The healthcare agreement between GM and the United Auto Workers requires the automaker to set aside $1 billion annually in 2006, 2007 and 2011 to offset increased medical costs for retired workers, according to a March 31 regulatory filing. Union retirees will pay premiums for the first time, according to the pact, which was aimed at generating pretax healthcare savings of about $3 billion a year by shifting expenses to workers.

GM initially reported first-quarter costs of $681 million, or $1.20 a share, for the first $1-billion payment to establish the healthcare fund.

The company had said the healthcare accord will help it reduce structural costs at an annualized rate of $7 billion by the end of this year, with $4 billion in savings in 2006. Monday the automaker increased the savings to $4.5 billion based on the accounting ruling.

GM also said that after the foreign exchange rate was finalized, the sale of its stake in Suzuki Motor Corp. raised $372 million, an increase from the previously reported gain of $317 million.

The GMAC finance unit had net income of $637 million in the first quarter. The results represent a $32-million increase from the previous estimate after accounting for the tax effect of the GMAC Commercial Mortgage Unit’s sale in March.

GM shares rose 37 cents to $23.55.