General Motors' ( GM) first-quarter profit slipped despite surging used-car sales and an improvement in worldwide automotive income, as a gain swelled the year-ago period.

GM earned $1.3 billion, or $2.25 a share, in the most recent quarter, compared with earnings from continuing operations of $1.5 billion, or $2.74 a share, last year. The year-ago period included a gain of $505 million, or 90 cents a share, from the sale of GM's defense unit. Revenue rose 3.1% to $47.8 billion in the latest quarter.

Analysts surveyed by Thomson First Call were forecasting earnings of $1.79 a share on revenue of $38.96 billion. GM also raised its full-year earnings guidance to $7 a share, excluding special items, up from its old range of $6 to $6.50 a share and above the Thomson First Call consensus of $6.30 a share.

The company's biggest earnings generator continues to be General Motors Acceptance Corp., which comprises its mortgage lending, insurance and auto finance arms. GMAC earned $786 million in the latest quarter, up from $699 million a year ago.

GMAC's financing operations had combined earnings of $442 million in the quarter, up $140 million from a year ago, reflecting lower credit-loss provisions and improved sales of cars coming off leases.

First quarter earnings at the insurance group were $91 million, up $65 million from a year ago, while earnings at the mortgage group totaled $253 million, down from last year's $371 million. GMAC cited lower mortgage-origination volume and decreased pricing margins.

GM's global automotive earnings rose 12% in the first quarter to $611 million, compared with $546 million in the prior-year period, driven by improved results in the GM Asia Pacific.

GM North America earned $451 million in the first quarter of 2004, compared with $548 million in the first quarter of 2003. The company cited a "tough" pricing environment, lower production volumes, and continued high health-care costs, which come out to about $1.5 billion a quarter.

GM Asia Pacific earned $275 million in the first quarter of 2004, up from $75 million in the year-ago quarter.

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