Ford has beaten analysts’ estimates of an operating loss of around 50 cents a share for the second quarter of 2009 by posting an after-tax loss of US$638m or $0.21 per share, compared with a loss of $1.4bn, or $0.63 per share, a year ago.

The automaker stunned Wall Street by announcing net income of $2.3bn, or $0.69 a share versus a staggering net loss of $8.7bn, or $3.89 a share in Q2 2008 but the fine print revealed a special items net gain of $2.8bn, or $0.90 per share, which included a $3.4bn gain related to Ford and Ford Credit’s recent debt-reduction actions.

Pre-tax operating loss was $424m – a $609m improvement year on year with Ford citing cost reductions, (better) net pricing, Ford Credit results and improved market share. Second quarter revenue was down $11bn to $27.2bn.

“While the business environment remained extremely challenging around the world, we made significant progress on our transformation plan,” said Ford president and CEO Alan Mulally.

He added the automaker was “continuing to aggressively restructure our business and strengthen our balance sheet”.

During the quarter Ford reduced automotive debt by $10.1bn, which it said would save over $500m a year in interest, raised $1.6bn through selling 345m shares (largely to fund a healthcare trust fund) and cut automotive structural costs by $1.8bn, including $1.2bn in North America. It also axed another 1,000 hourly workers through buyouts.

Ford said it ended the second quarter with $21bn in automotive cash, compared with $21.3bn at the end of the first quarter of 2009. Automotive operating-related cash flow was $1bn negative during the second quarter of 2009, an improvement of $2.7bn from the first quarter. Automotive operating-related cash flow was $4.7bn negative during the first half; but on track with plans, according to the company.

The global automotive sector reported a pre-tax operating loss of $1bn, compared with a pre-tax loss of $699m in Q2 2008. Revenue declined from $34.1bn to $24bn. Total vehicle sales fell to 1,172,000 from 1,562,000 units last year.

Pre-tax loss in North America improved to $851m from $1.3bn on revenue of $10.8bn, down from $14.2bn a year ago.

South American pre-tax profit fell to $86m from $388m, Ford Europe profit dipped to $138m from $582m and the pre-tax loss at up-for-sale Volvo widened from $120m a year ago.

The Asia Pacific and Africa region booked a pre-tax loss of $25m versus a $50m a year with Ford citing mainly “adverse market mix”.

Financial services reported a pre-tax profit of $595m, compared with a loss of $334m a year ago, and Ford Credit pre-tax profit was $646m, well up on the pre-tax loss of $294m in Q2 2008.

Ford said it remained on track to achieve or exceed all of its 2009 financial targets and expected full year market share to improve in the US and Europe.

It has pegged 2009 US industry sales at between 10.5m and 11m units, unchanged, but put Europe’s full year volume at 15m to 15.5m units, higher than previously with the outlook boosted by better than anticipated first half volume.