WASHINGTON: Ford Motor Co. on Monday posted a surprise third-quarter profit of 997 million dollars on improvement in its North American business, and said it was on track to become "solidly profitable."

The number two US automaker swung to the black from a loss of 161 million dollars the same period in 2008, as Ford continued to restructure to cope with an ailing market amid the worst global downturn in decades.

Overall pre-tax operating profit totaled 1.1 billion dollars, an improvement of 3.9 billion dollars from the 2008 July-September period and the first quarterly profit since the first quarter of 2008, the company said.

The swing into profit of earnings per share of 26 cents, excluding special items, surprised most analysts who had expected a 12 cent loss.

For the key North America market, the company posted a pre-tax operating profit of 357 million dollars, its first profitable quarter since the first quarter of 2005.

The improvement came amid cost-cutting and the government's popular "cash-for-clunkers" tax credit program in July and August that boosted US car sales.

Ford is the only Detroit Big Three automaker that did not get government aid to cope with the auto sales slump and, unlike rivals General Motors and Chrysler, did not go bankrupt this year.

"Strong new products, structural cost reductions and improved results at Ford Credit lifted the company's results despite continued weak global economic conditions," the company said in a statement.

"Ford now expects to be solidly profitable in 2011, excluding special items, with positive operating-related cash flow."

Ford also reported operating profits in its South America, Europe and Asia Pacific Africa businesses.

"Our third-quarter results clearly show that Ford is making tremendous progress despite the prolonged slump in the global economy," said Ford president and chief executive Alan Mulally.

"Leading indicators are now showing signs of recovery in all of our major markets, however, consumer confidence and labor market conditions remain a concern," Mulally said.

Ford said third-quarter revenue was 30.9 billion dollars, down 800 million dollars from the same period a year ago.

A rise in automotive sales of 100 million dollars from a year ago was offset by a decline in Ford Credit revenues, largely due to loan losses, the company said.

Ford projected full-year 2009 US industry sales of 10.6 million units, in line with previous guidance, and raised the full-year guidance for Europe to 15.7 million units.

Ford said it slashed 1.0 billion dollars from structural costs in its automotive sector during the quarter, resulting in part from job cuts primarily in North America and Europe.

Through the first nine months of the year, Ford said it had reduced automotive structural costs by 4.6 billion dollars, topping its full-year 2009 target of 4.0 billion dollars. It said its major restructuring actions over the past four years had been largely completed.

Ford said it remains on track to achieve or exceed all of its 2009 financial targets.

While the 2011 outlook was positive amid expectations the global economy will be improving, Ford said that 2010 prospects were uncertain, particularly with the expiration of European auto sales incentives that would likely sharply reduce sales volumes.

"This decrease could more than offset US sales volumes, which may improve somewhat from this past quarter's levels," the company said.

Ford said it would provide guidance on its 2010 outlook when it releases its full-year 2009 results early next year.

"Ford maintains that it will be profitable in 2011, but it did not pull forward this forecast to 2010, somewhat surprising given the profitable quarter just reported," said Himanshu Patel, analyst at JPMorgan.