DEARBORN, Michigan (AP) — Helped by a lightened debt load, Ford Motor Co. posted a surprise second-quarter profit of $2.3 billion yesterday, following the worst loss in company history a year earlier. Shares rose 10 percent in afternoon trading.

The net profit ends a string of four straight quarterly losses for the nation's second-largest automaker, which has gained US market share at the expense of crosstown rivals Chrysler Group LLC and General Motors Co., both of which spent time under bankruptcy court supervision. Ford last went into the black in the first quarter of 2008, with net profit of $70 million.

However, excluding its debt reduction and other items, Dearborn, Michigan-based Ford would have reported a quarterly loss, though smaller than Wall Street expected.

Chief financial officer Lewis Booth said the improved second-quarter results are a sign that the company's cost cuts and emphasis on new products are paying off. He stuck to Ford's earlier prediction that it would return to annual profitability in 2011.

"We're 18 months away, I guess," he told reporters yesterrday, adding that a full year of profitability hinges on improved auto sales in the US and Europe.

Unlike GM and Chrysler, Ford avoided bankruptcy and government loans, mainly by borrowing or setting up credit lines totalling $23.5 billion in 2006 and 2007 to prepare for an economic downturn. Since then the company has cut costs and rolled out new vehicles, mitigating its sales decline in the worst auto sales market in more than a quarter-century.

Ford reported second-quarter net income of 69 cents a share, compared with a loss of $8.7 billion, or $3.89 a share, for the same quarter a year ago.

Aaron Bragman, an analyst for the consulting firm IHS Global Insight, attributed Ford's progress to restructuring and product improvements made under CEO Alan Mulally, who was hired away from aircraft giant Boeing Co. in 2006. Mulally also made the decision to borrow the money before the credit markets froze.

Despite the progress, though, Ford still faces challenges of dealing with its debt and trying to erase cost advantages that Chrysler and GM have gained because of their stays in bankruptcy. GM and Chrysler can finance cars and trucks with low-cost government money, something that Ford also does not have access to, Bragman said.

The company also is shifting its model lineup toward smaller cars, which could end up being a liability, Bragman said.

"If gas prices do not begin to climb, they're also going to face the challenge of having a lot of small cars to sell and there may not be the demand for them," he said.

Ford's second-quarter results got a boost from lowering its debt load. Earlier this year the company swapped stock and cash to reduce its loan and bond debt by $10.1 billion, cutting its interest payments by more than $500 million.

The company made $1.8 billion in structural cost cuts for the quarter, including 1,000 blue-collar job cuts through buyout and early retirement offers. Ford now has 47,300 factory workers, which it says is about the correct level.

But excluding special items, including the debt reduction, Ford would have lost $424 million, or 21 cents a share. Those results still beat analysts' expectations of a per share loss of 50 cents on revenue of $24.7 billion. Excluding special items, the company lost just over $1 billion in the second quarter of last year.

Revenue totalled $27.2 billion, 40 percent less than a year earlier as the worldwide auto sales slump continued.

Ford spent $1 billion more in cash than it earned in the quarter, a 73 percent reduction from the $3.7 billion it spent in the first quarter.

Ford also raised $1.6 billion by selling 345 million more shares during the quarter, and said it is likely to take further steps this year to lower debt and raise cash.