) -- Closely watched


(F) - Get Report

reported its best quarter in six years and blew by analyst estimates.

Including items, net income was $2.6 billion, or 61 cents a share, representing a $338 million improvement from the same quarter a year earlier.

Excluding items, Ford reported a pretax operating profit of $2.9 billion, or 68 cents a share. Analysts surveyed by Thomson Reuters had estimated 40 cents. The results represented an improvement of $3.5 billion from a year earlier and the best quarterly performance since the first quarter of 2004.

Revenue was $31.3 billion. Analysts had estimated $29.8 billion. Excluding 2009 Volvo revenue, revenue rose about 30%.

Ford Stock Rating Report (F) Rating and Financial Analysis

"We delivered a very strong second quarter and first half of 2010 and are ahead of where we thought we would be despite the still-challenging business conditions," said CEO Alan Mulally, in a prepared statement. "We remain on track to deliver solid profits and positive automotive operating-related cash flow for 2010, and we expect even better financial results in 2011."

Ford said every automotive business operation reported a profit for the quarter and showed improvement from a year earlier. Ford North America posted a pretax operating profit of $1.9 billion, a $2.8 billion improvement. Ford Automotive operations posted a second-quarter pretax operating profit of $2.1 billion, a $3.2 billion improvement.

Ford ended the quarter with $21.9 billion of automotive gross cash, total liquidity of $25.4 billion and automotive debt of $27.3 billion, after retiring $7 billion of debt during the quarter. By the end of 2011, the company expects to move from an automotive net debt position to a net cash position.

The company expects current quarter production to increase by 126,000 from a a year earlier. Production will decrease by 174,000 from the second quarter, reflecting planned vacation shutdowns. Ford expects 2010 industry sales between 11.5 and 12 million vehicles, with its own market share improving.

-- Written by Ted Reed in Charlotte, NC