DETROIT - Ford Motor Co surprised Wall Street with a quarterly profit on Monday and raised its 2011 outlook to solidly profitable, sending its shares up 5.7 percent in premarket trading.

Ford, the only large U.S. automaker to avoid bankruptcy in 2009, said the third-quarter results were supported by cost-cuts, improved credit results and increased market share in North America and other key areas.

Ford burned through $4.7 billion of cash in the first half of 2009 but reported $1.3 billion of positive cash flow in the third quarter -- its first positive cash flow since the second quarter of 2007. It said it expects positive cash flow in the fourth quarter as well.

That's a huge deal, Chief Financial Officer Lewis Booth said of the positive cash flow. Booth was speaking to reporters after the release of the results.

The company also reported its first quarterly operating profit in its key home market of North America since the first quarter of 2005.

Our third-quarter results clearly show that Ford is making tremendous progress despite the prolonged slump in the global economy, Chief Executive Alan Mulally said in a statement.

Ford, which raised its 2011 outlook from a previous forecast for at least break-even, said it was confident the global economy would be improving by 2011. But it said the near-term growth outlook remains rather uncertain.

Some analysts believe Ford will be profitable next year.

Ford proved they can be profitable at much lower sales levels. A lot of it came from cost-cutting but also from market share gains, said Erich Merkle, an analyst.

Now, as the market starts to turn and sales volumes start to recover, Ford should be solidly in the black next year -- certainly ahead of schedule, he said.

Ford reported a net profit of $997 million, or 29 cents per share, for the third quarter, compared with a net loss of $161 million, or a 7 cents per share, a year earlier.

Operating profit was 26 cents per share excluding one-time items. On that basis, analysts on average expected a loss of 12 cents per share, according to Thomson Reuters I/B/E/S.

Revenue fell by $800 million to $30.9 billion.

From its automotive business, Ford reported a $446 million pre-tax operating profit worldwide, including positive results in all four of its regions -- North America, South America, Europe and Asia Pacific.

It was Ford's first quarterly operating profit in its key home market of North America since the first quarter of 2005.

Ford posted losses totaling $30 billion from 2006 through 2008. The company remains saddled with a much heavier debt load than General Motors or Chrysler following their bankruptcy reorganizations.

Still, Ford has been seen as in much better shape than its U.S. rivals in its finances and product lineup. Ford has cut thousands of salaried and hourly workers in restructuring over the past four years, but has maintained its product cycle.

Ford and other automakers are fighting through a plunge in auto sales in North America due to the recession. The company left its 2010 U.S. auto industry sales forecast at 12.5 million vehicles, including medium and heavy trucks, but said it would give an updated outlook early next year.

Clearly, there are still economic headwinds, Booth said.

Ford said it expects 2009 U.S. auto industry sales of 10.6 million vehicles. It previously forecast a range of 10.5 million to 11 million.

Until a U.S. economic recovery takes off, cash will remain king for Ford, which borrowed more than $23 billion in late 2006 to finance its turnaround and believes it has enough money to complete its restructuring.

Ford has been restructuring since 2005, trimming excess production capacity, hourly and salaried workers and divesting brands to focus on Ford, Lincoln and Mercury.

Last week, the company said Zhejiang Geely Holding Group was the preferred bidder to acquire its Swedish brand Volvo.

Not all the news on Monday is expected to be rosy for Ford. The United Auto Workers union is expected to announce around midday that its rank-and-file workers have rejected concessions union leaders agreed to in a tentative agreement with Ford in mid-October.

Booth declined to comment on the ratification vote.

Ford received $500 million in annual labor cost savings from concessions negotiated with the UAW in February, but said it needed further cuts to align long-term costs with those of GM and Chrysler.

Ford's union workers in Canada ratified a cost-cutting deal over the weekend to preserve most of the Ford jobs in Canada.

The proposed agreement U.S. workers are chafing at includes a no-strike clause on wages and benefits and a reduction in job classifications for skilled trades workers, as well as some production commitments and a one-time bonus of $1,000 per worker.

Ford Motor Credit Co posted a net profit of $427 million for the third quarter.

Ford shares rose 40 cents to $7.40 in premarket trading.

(Reporting by David Bailey and Soyoung Kim; Editing by Derek Caney and John Wallace)