Ford Motor Co. surprised Wall Street on Thursday with second-quarter earnings of $750 million US, its first profitable quarter in two years.

The company also confirmed it is exploring the sale of its Jaguar and Land Rover subsidiaries and said its U.S. market share rose during the quarter.

The profit of 31 cents a share compares with a net loss of $317 million, or 17 cents a share, in the same quarter of last year.

The company attributed the gains to significant year-over-year improvement in all of its automotive operations, and to cost cuts due to restructuring and positive special items that totaled $443 million. That includes a $206-million gain related to sale of its Aston Martin unit. Even its struggling North American division showed progress.

Fifteen analysts polled by Thomson Financial expected the company to lose 35 cents a share, excluding special items.

Ford shares rose about 2.9 per cent in pre-market trading to $8.20 after the earnings news.

Ford said it is exploring the potential sale of Jaguar and Land Rover based on discussions with parties that have expressed interest in the British units. And the company said it is conducting a strategic review of Volvo "that likely will conclude prior to year end."

Despite the quarterly earnings, the company said it still doesn't expect to post an annual profit until 2009, although it is burning cash at a slower rate than the $17 billion through 2009 that the company had predicted.

Even without the positive special items, the company still made money in the quarter, posting a profit of $258 million, or 13 cents a share. That compares with a loss of $118 million, or 6 cents a share, in the year-ago quarter.

"Our team is very encouraged by the significant progress we are making. We recognize the challenges that lie ahead and remain fully committed to delivering our plan," CEO Alan Mulally said in a statement.

Dearborn-based Ford reported revenue of $44.2 billion for the quarter, a 5.5 per cent gain over the $41.6 billion reported in the year-ago period.

Ford said its automotive sector made $378 million for the quarter, compared with a pre-tax loss of $716 million during the second quarter of last year.

Although its core North American operations showed improvement, they still posted a pre-tax loss of $279 million. That compares with a loss of $789 million a year ago.

The company reported cost reductions of $600 million for the quarter, or $1.1 billion for the full year, primarily due to health-care cost concessions negotiated with the United Auto Workers, the departure of 27,000 U.S. hourly workers who took buyout or early retirement offers and reduced warranty repair costs.

It also reported that its U.S. market share reversed its decline, rising to 15.6 per cent for the quarter from 15.1 per cent in the first quarter. It was 16.7 per cent in the second quarter of 2006.

Ford's Premier Automotive Group, which includes Jaguar, Land Rover and Volvo, reported a pre-tax profit of $140 million for the quarter, an improvement over the loss of $162 million for the same period in 2006. The company said all brands advanced. The profit comes at a time when all three are under consideration for sale as Ford tries to raise cash needed to fund its restructuring plan.

The automaker's Asia Pacific and Africa unit made a pretax profit of $26 million, and Ford made $255 million pretax in South America. In Europe, Ford made $262 million, and its financial services arm turned a pretax profit of $105 million, down from $425 million in the same quarter last year.