General Motors Co. reported first-quarter net income of $865 million, helped by higher production and smaller discounts, as the maker of the GMC Terrain and the Chevrolet Equinox works toward an initial public offering, Bloomberg reported. Operating profit was $1.2 billion in the first three months of the year, and the company generated $1 billion in free cash flow, Detroit-based GM said in a statement. Revenue rose 40 percent from the same period a year earlier to $31.5 billion. CEO Ed Whitacre has said reporting a profit is a necessary milestone as the biggest U.S. automaker seeks freedom from government ownership. GM, which emerged from bankruptcy protection in July, is considering a return to the auto-lending business to make its offering more appealing to investors, people familiar with the plans said last week. “The unfortunate process of bankruptcy is yielding positive results,” Rebecca Lindland, an analyst at IHS Global Insight in Lexington, Mass., said in an interview. “It certainly keeps them on track for an IPO.” GM North America and the company’s international operations each had profits before interest and taxes of $1.2 billion, while the automaker had a $500 million loss in Europe. GM’s 8.375 percent bonds due in July 2033 rose 2.125 cents to 37 cents on the dollar at 10:24 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The debt was issued by predecessor General Motors Corp. and will convert into equity in the new GM.