(Adds details of earnings performance)
SAO PAULO, May 10 (Reuters) - Brazilian airline Gol Linhas Aéreas Inteligentes SA reported stronger-than-expected quarterly profit on Wednesday as rising cargo revenue and tight cost controls contributed to a gradual recovery despite fragile domestic demand.
First-quarter net income of 233 million reais ($74 million) beat an average forecast of 151 million reais in a Reuters poll of analysts. Profit fell 69 percent from a year ago, when sale-leaseback arrangements for several aircraft provided a one-time boost of 213 million reais, according to a securities filing.
Passenger traffic edged up 1.3 percent on Gol's domestic flights and fell 4.3 percent on international routes as the airline cut its network 2 percent after two years of deep recession.
However, cargo and other ancillary revenue jumped 27.3 percent from a year earlier to 13.2 of total net revenue, adding to leading indicators of a gradual recovery in Latin America's largest economy.
Earnings before interest and taxes (EBIT) fell 42 percent from a year earlier to 253 million reais, or 9.6 percent of net revenue. Excluding the one-time effects of returned aircraft, sale-leaseback contracts and a tax adjustment program, Gol said EBIT would have jumped 54 percent.
$1 = 3.17 reais Reporting by Brad Haynes; Editing by Frances Kerry