Ford, the only major American carmaker to avoid bankruptcy in the global economic crisis, reported net profits of $997 million (£609 million) for the third quarter and said that it expected to be “solidly profitable” again in 2011.

The company said that its third-quarter pre-tax operating profits of $1.1 billion, or 26 cents a share, represented its first operating profit since the first quarter of 2008. This marks an improvement from a loss of $3 billion, or $1.32 a share, last year, and is significantly ahead of Wall Street expectations.

Revenue for the quarter was $30.9 billion, down $800 million from the same period a year ago. The carmaker also said that it increased its cash reserves by $1.3 billion during the quarter, ending September with $22.3 billion.

Ford’s North American operations achieved pre-tax operating profits of $357 million, their first quarterly profit since the first quarter of 2005. Ford South America, Ford Europe and Ford Asia Pacific Africa also reported pre-tax operating profits in the third quarter.

Alan Mulally, Ford's president and chief executive, said that the company, which removed $1 billion from structural costs in the third quarter and $4.6 billion so far this year as part of an aggressive cost-cutting drive, was making progress despite the prolonged slump in the global economy. “Our solid product line-up is leading the way in all markets,” he said.

In the US market, Ford is hoping to replicate the success that it has had in Britain and the rest of Europe with its new fuel-efficient Ford Fiesta, a key driver of its market share gains, when it brings the compact model to America next year.

More than half a million customers have bought the model in Europe since its launch a year ago, making it the second-best-selling car in the European market and the leader in the small car segment.

However, the company warned that a possible decline in sales in Europe, after the end of government-backed scrappage schemes, could “more than offset” hoped-for gains in North American markets.

Plans to cut labour costs further may be hampered by a failure to reach agreement with the United Automobile Workers union, which is expected to announce later today that its members have rejected a deal that would have matched concessions that workers for Chrysler and General Motors approved earlier this year.

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