GM headquarters in Detroit. Photo credit: General Motors Co.

General Motors (NYSE:GM) reported first-quarter earnings of $865 million on Thursday, a better than expected result driven in part by a surprisingly narrow loss in Europe.

Excluding one-time items, GM earned $0.67 a share in the quarter, handily beating the Wall Street consensus estimate of $0.54.

Given GM's size and sales, $865 million isn't a big profit. It's much less than the $1.6 billion first-quarter profit that smaller rival Ford (NYSE:F) reported last week.

But sometimes, the headline number doesn't tell the whole story. This is one of those cases.

Europe may finally be turning around
One of the big stories here was GM's loss in Europe: At $175 million, it was much smaller than nearly anyone had expected. Most observers, including your humble Fool, expected a loss in the $400 million-$500 million range.

But there are signs that GM's moves to restructure its long-troubled European operation are taking hold earlier than expected. Sales in much of Europe were terrible in the first quarter, as deep recessions drove industrywide totals to lows not seen in almost two decades. But the story here is that GM held the line on pricing, resisting the urge to match competitors' deep discounts, and let the hard cost-cutting moves it has made over the last year take hold.

Here are the highlights from GM's other regional business units. All of these numbers (and the Europe loss) are what GM calls "EBIT-adjusted" – meaning that they exclude taxes and some other items to give a better basis for comparison:

  • North America earned $1.4 billion, down from $1.6 billion in the year-ago quarter – but better than the $1.2 billion expected by analysts. GM's U.S. sales were actually up 9.3% in the first quarter, ahead of the overall market. But pricing was relatively weak versus the year-ago quarter, as GM raised incentives to help clear out inventories of Chevy Silverado and GMC Sierra pickups ahead of new models due later this year. Still, those incentives were less than had been expected (and they came down in April).
  • South America posted a loss of $38 million, down from a $153 million profit a year ago. As with Ford, Venezuela's currency devaluation weighed heavily: GM took a one-time charge of $162 million as a result, which more than wiped out the improvements in pricing that GM saw in the region during the quarter
  • International operations, GM's "rest of the world" unit that includes its massive China operation, posted a profit of $495 million, down a bit from $521 million a year ago. GM is investing heavily to build a series of new factories in China and India, and those costs will weigh on earnings for the next several quarters. GM reports earnings from its joint ventures in China as equity income, and that totaled $550 million for the first quarter, reflecting increased sales.
  • GM Financial, the company's in-house financing arm, earned $180 million, down slightly from $181 million a year ago. Leases were up, subprime loans were down, credit losses were up very slightly, but overall, a solid result for a business whose importance to GM extends far beyond its contribution to the bottom line.

The upshot: all things considered, a good quarter
GM's buttoned-down CEO, Dan Akerson, doesn't fit the stereotype of a Detroit automaker CEO, and that has led many to write him off as out of his depth. But results like this quarter's are making clear that his insistence on old-school business fundamentals – clear reporting, cost discipline, a strategic global view – are starting to pay off for an organization that was kind of a mess on those fronts for a long time.

Your Foolish auto analysts will have more on GM's quarter over the next day or two as we hear from GM executives and get more details on what did and didn't work for America's largest automaker in the first quarter. Stay tuned.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.