DETROIT – General Motors Co. rode expense cuts from its bankruptcy and strong sales of redesigned models to its first quarterly net income in nearly three years, drawing the company closer to a stock offering that would repay at least part of its government aid.

The Detroit automaker said it made money because debt and other expenses were slashed by its stay in bankruptcy court last year, and because of strong new-model sales. It also generated higher revenue from growth in Asia and South America.

GM reported net income of $865 million, or $1.66 per share, in the first quarter. That compared with a loss of $6 billion, or $9.78 per share, a year earlier as it skidded into bankruptcy protection. First-quarter revenue soared 40 percent to $31.5 billion.

New models such as the Chevrolet Equinox small sport-utility vehicle and the Buick LaCrosse luxury sedan lifted GM’s North American operations to a $1.2 billion profit, compared with a $3.4 billion loss in the year-earlier quarter. North America had been a continual drain on GM’s profits before its bankruptcy filing last year.

Chief Financial Officer Chris Liddell said it may be difficult to sustain the same level of profit for the remainder of the year because first-quarter production is usually higher than other quarters, with automakers ramping up for the spring selling season.

“I’d still be reasonably cautious about the rest of the year,” he said.

CEO Ed Whitacre has predicted a full-year profit as U.S. auto sales continue their slow recovery. That could lead to a public sale of GM’s stock and full repayment of the $50 billion in U.S. government aid that stopped GM from going under last year. The U.S. government now owns 61 percent of the company.

The automaker has repaid $6.7 billion to the government. The Obama administration hopes to get back the remaining $43 billion by selling its stake.

For taxpayers to break even by selling the government’s remaining investment, the total dollar value of GM’s outstanding shares, or market capitalization, would have to reach about $70 billion after an IPO. That’s nearly double the size of Ford Motor Co.’s current market cap.

GM has said that it hopes to make an initial public offering, or IPO, late this year.

GM has lost more than $86 billion since 2005, even though it had a few profitable quarters along the way. Before heading into bankruptcy protection it had almost $53 billion in debt, but it ended last quarter at $14 billion. GM paid $5.8 billion to the U.S. and Canadian governments in April, reducing its debt further to $8.4 billion.

GM, once a symbol of U.S. industrial might, would have disappeared late in 2008 or early last year without help from the government. The company cut 10,000 workers last quarter and now employs 205,000 people across the globe, including 77,000 in the U.S.

The company has cut worldwide employment by nearly half in the past decade.

In bankruptcy court, GM was split into two companies, the old one carrying unprofitable assets and much of its debt, while the new one moved forward with a much stronger balance sheet. Based on the trading price of Old GM’s bonds, the U.S. government could get back $40 billion, former Obama administration auto czar Steven Rattner said last week.

GM lost $3.4 billion in the fourth quarter of 2009 on revenues of $32.3 billion, the company’s first full quarter out of bankruptcy protection. The last time the largest U.S. automaker made a quarterly profit was the second quarter of 2007, when it earned $891 million.

On Monday, GM said it paid $203 million in dividends to its preferred stockholders, the U.S. and Canadian governments and a United Auto Workers union retiree health care trust.

The company reported $35.7 billion in cash at the end of the quarter, including a final installment in April of $6.6 billion in aid from the U.S. government. That money had been held in a GM escrow account that required Treasury Department approval to release.