Ford

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posted a higher-than-expected second-quarter profit, reversing its year-ago loss on strong North American production and cost-cutting measures.

The company earned $570 million, or 29 cents a share, including charges, compared with a year-ago loss of $752 million, or 42 cents a share. Excluding special charges, Ford earned an operating profit of $610 million, or 31 cents a share, up from a loss of $551 million, or 31 cents a share, a year ago.

On an operating basis, analysts polled by Thomson Financial/First Call had been looking for a profit of 26 cents.

Second-quarter revenue was flat at $42.3 billion, as were worldwide vehicle unit sales at 1.854 million.

Ford said its worldwide automotive operations earned $205 million in the quarter, compared to a year-ago loss of $1 billion, which included charges related to the Firestone tire recall. North American production was up 4%, but the company's U.S. sales were down almost 11% through June. European volume was down in the quarter due to a "lower industry."

Ford's Credit division posted earnings of $343 million for the quarter, down from $399 million last year due to higher actual credit losses. The company said these higher credit losses reflect higher levels of unemployment and bankruptcies in the U.S.

Hertz, the company's rental car division, saw its profit fall to $53 million from $59 million last year on lower rental volume, but Ford says the business has begun to recover from Sept. 11.

Going forward, Ford said in a press release that it "continues to expect a modest profit for the full year, but those results are still unacceptable." Analysts polled by First Call are looking for the company to earn 23 cents for the year.

Shares of Ford closed Tuesday at $12.50 before the earnings release.