NEW YORK (Bloomberg) Ford Motor Co., the second-biggest US automaker, surprised investors with its first quarterly profit in two years, helped by the sale of Aston Martin and reduced spending on pensions and warranties.

Ford earned $750 million, or 31 cents a share, compared with a loss of $317 million, or 17 cents, a year earlier. When the gain for Aston Martin and costs for job cuts are excluded, the profit was $258 million, or 13 cents, versus the average estimate of a 37-cent loss in a Bloomberg survey of 13 analysts.

"Everything looks better; no one region carried the company," said Dan Poole, who helps manage $31 billion, including Ford shares, at National City Bank in Cleveland. "There's a lot of positive news here for investors."

The profit is the first under chief executive officer Alan Mulally, 61. Mulally, recruited last year from Boeing Co., is selling European luxury brands while closing 16 of 41 North American plants by 2012 in response to shrinking US market share.

The Dearborn, Michigan, automaker made money on vehicles for the first time in more than two years. Improved quality on cars such as the Lincoln MKZ and Mercury Milan reduced warranty spending, blunting the impact of continued sales declines for F-Series pickups and Explorer sport-utility vehicles.

In June, Ford for the first time placed four brands among the industry's top 10 in the annual Initial Quality Study from J.D. Power & Associates of Westlake Village, California.

Ford shares rose 24 cents to $8.21 at lunchtime in New York Stock Exchange composite trading yesterday. Ford's 7.45 percent bond due July 2031 fell 0.75 cent, to 74.25 cents on the dollar, according to Trace, the bond-price reporting system of the NASD. The yield rose to 10.4 percent.

The company yesterday repeated its projection that it won't be profitable on an annual basis until 2009, mainly because of North America. Last year, Ford lost a record $12.6 billion.

Sales for the quarter rose 5.5 percent to $44.2 billion. Ford achieved $600 million in cost savings during the quarter and $1.1 billion for the first half of the year. Included in the first-half figure were a $700 million reduction in warranty costs and an $800 million drop in pension-related costs.

Those and other improvements were offset partially by $1.3 billion in increased product costs and a $100 million boost in advertising spending. The company cut 6,400 North American jobs in the quarter.

"We are not ready to claim victory," Mulally said on a conference call with analysts and reporters. The worldwide auto unit will have a loss for 2007 while improving from last year, he said.

Ford also said it will spend less than the $17 billion in cash it expected to use through 2009. The amount may be $15 billion to $16 billion, chief financial officer Don Leclair said on the call.

The company first made the $17 billion estimate late last year when it borrowed $23.4 billion while putting assets, including its headquarters building and blue oval Ford trademark, up as collateral.

Ford said gross cash rose to $37.4 billion on June 30 from $35.2 billion on March 31.

"The cash situation seem to be holding up reasonably well, and that's our primary focus," Robert Schulz, a Standard & Poor's fixed-income analyst in New York, said in an interview. S&P rates Ford debt B, or five steps below investment grade.

The company will have "substantial negative" cash flow in the second half, Leclair said on the call.

Ford completed a sale of Aston Martin, a UK-based maker of luxury sports cars, for $848 million in May. Ford had pretax gains related to Aston Martin of $206 million. It was sold to investors led by UK auto-racing champion David Richards.

The automaker said it's examining the sale of Jaguar and Land Rover "in greater detail" after receiving preliminary bids last week. Ford didn't identify bidders for the UK luxury brands. There is a "greater than 50" percent chance Ford will sell Jaguar and Land Rover, Mulally said on the call.

Jaguar and Land Rover are "in great shape," Mulally said in an interview. He said the automaker wants to sell them so it can focus on coordinating product-development functions worldwide.

Ford paid $2.5 billion for Jaguar in 1989 and $2.73 billion for Land Rover in 2000. Jaguar has been a money loser, while Ford has made Land Rover profitable.

The company also said it's conducting a "strategic review" of Sweden-based Volvo that it expects to complete before the end of 2007. Ford acquired Volvo for $6.45 billion in 1999.

Ford's worldwide auto operations had a pretax profit of $378 million compared with a loss of $716 million for the same period last year. The figures exclude costs and gains the company considers one-time events.

The auto unit hadn't generated a quarterly profit since the first quarter of 2005. Ford said the improvement reflected cost reductions and improved pricing.

Ford's North American auto unit narrowed its pretax loss to $279 million, from $789 million a year earlier. The company also said profit in its South American auto operation rose to $255 million from $99 million, while Ford of Europe increased to $262 million from $185 million.

Also reporting a profit was Ford's Premier Automotive Group, which includes Jaguar, Land Rover and Volvo. The unit had a pretax profit of $140 million, compared with a $162 million loss for 2006's second quarter.

"It's a very impressive performance," said John Casesa, managing partner of auto consulting firm Casesa Strategic Advisors LLC in New York. "North America is still in trouble, but overseas generally did better than expected."

To earn the profit, Ford had to overcome falling US sales of pickups and truck-based sport-utility vehicles. New car models and so-called crossover SUVs haven't been able to pick up the slack. Ford's US vehicle sales tumbled 9.3 percent in the quarter, led by declines for F-Series pickups and Explorer SUVs.

Ford Motor Credit Co., which makes loans to buyers of the automaker's cars and trucks, said net income fell to $62 million from $304 million a year earlier.