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Updated from 8:10 a.m. EDT

Investors got a sobering dose of reality from

Ford

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Monday as the struggling automaker reported its largest quarterly loss since 1992.

The quarter's results were loaded with restructuring charges and asset writedowns stemming from the company's sweeping restructuring effort. Ford also said it will restate earnings results dating back to 2001 to fix the way its financing division accounted for interest rate swaps.

The company said it lost $5.8 billion, or $3.08 a share, for the third quarter. That marks a steep deterioration from the loss of $284 million, or 15 cents a share, it recorded for the same quarter last year.

The most recent loss includes charges totaling $4.6 billion resulting from Ford's massive turnaround efforts for its automotive operations in North America and a revaluation of certain assets, such as its Jaguar and Land Rover brands. Excluding one-time items, Ford recorded a preliminary quarterly loss of $1.2 billion, or 62 cents a share. Analysts surveyed by Thomson Financial had expected a loss of 61 cents a share.

Shares of Ford were recently down 12 cents, or 1.5%, to $7.89.

"These business results are clearly unacceptable," Ford's new CEO, Alan Mulally, said in a press release. "We are committed to dealing decisively with the fundamental business reality that customer demand is shifting to smaller, more efficient vehicles. Our focused priorities are to restructure aggressively to operate profitably at lower volumes, and to accelerate the development of new, more efficient vehicles that customers really want."

Revenue from Ford's automotive operations declined 6% to $32.6 billion from $34.7 billion in the same period a year ago. That was in line with analysts' expectations.

Like its larger counterpart,

General Motors

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, Ford has been plagued by cost burdens and market-share losses in North America to Asian-based rivals such as

Toyota

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. Aiming to return to profitability by 2009, the company has cut production, closed plants and laid off workers in an effort to bring its operations in line with its dwindling market share.

After a disastrous year in 2005, shares of Ford have climbed about 5% in 2006 as investors bet on a turnaround. Recently, it rolled out a massive employee buyout offer that mirrors a similar measure taken by GM in order to pare down payroll and legacy costs. It also hired Alan Mulally, a former

Boeing

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executive, to take the place of Chairman Bill Ford as CEO of the company.

Ford Chief Financial Officer Don Leclair said on a conference call Monday that operating losses will be worse in the fourth quarter, but in 2007, its restructuring efforts will start to yield cost savings that will boost its bottom line. He did, however, say that raw materials commodity costs could potentially be a drag on profits next year.

For the third quarter, Ford's North America automotive operations lost $2 billion, widened from a loss of $1.2 billion a year ago and $1.3 billion in the second quarter. Revenue from that business fell to $15.4 billion from $18.2 billion, as sales of pickup trucks and sport-utility vehicles continued to slow.

Ford Credit, its financing arm, also lost ground. The business reported earnings of $262 million, down from $577 million a year ago.

"The decline at Ford Credit is alarming," says Argus Research analyst Kevin Tynan. "The company has been able to hold up profits from Ford Credit as something to offset its troubles on the automotive side, but that crutch is going away."

Overall, the automaker posted a negative $3.1 billion cash flow during the quarter, and it said it expects the cash bleed to continue through 2008. It ended the period with $23.6 billion in cash, and it said it expects to end the year with about $20 billion.

Ford said it will consider using certain assets as collateral for financing to maintain its cash reserves.

"We want to make sure that we have a liquidity cushion in the event of something unexpected in the economy," said Leclair.

He said Ford has no plans to sell its finance arm, as GM did in an effort to raise cash.

"It's very important for us to maintain the synergies between our financing arm and our sales and marketing arm," Leclair said.

He did indicate the company would consider other asset sales and partnerships for its automotive businesses in order to boost liquidity. Ford has already announced intentions to sell its Aston Martin brand, and Leclair said the company has received many inquiries about the brand.

"We're in the process now of winnowing it down to a short list," he said.

During the quarter, Ford established a valuation allowance of $2.2 billion against deferred tax assets primarily at its North American and Jaguar/Land Rover operations. The allowance was set up because of the cumulative losses the company has incurred and the financial outlook for the operations.

As for its accounting restatements, Ford said they will cover 2001 through the second quarter of this year, and they could affect the third-quarter numbers. As a result, Ford indicated that it might make changes to the third-quarter results when it files its complete financials with regulators.

Although the final restatement amounts haven't been determined, the company believes its 2002 results "will improve materially." Other periods are still being reviewed.

GM is expected to report its results on Wednesday. Analysts, on average, are estimating the company will report earnings of 49 cents a share, before charges, a big improvement over last year's loss of $1.92 a share.