Ford Motor Co sees great options to improve its balance sheet and return to investment grade credit rating as its financial results continue to strengthen, Chief Executive Alan Mulally said on Friday.

Mulally affirmed forecasts for a solid profit in 2010 and said cost savings from using common global platforms, growing market share and improving pricing would deliver greater profits in 2011 and beyond.

The No. 1 strategy we're pursuing is to continually improve operational performance. That allows us to accelerate (balance sheet) improvement. It gives great options to do that, Mulally told analysts in a meeting that was webcast.

We are going to accelerate improvement to get back to investment grade, which is our intent, as quickly as we can, he said.

Standard & Poor's in April kept its B-minus credit rating on Ford, six notches below investment grade, but revised its outlook to positive from stable, indicating more than a 1-in-3 chance of upgrade during the next year.

The No. 2 U.S. automaker, which has divested Jaguar, Aston Martin and Land Rover and is completing the sale of Volvo, continues to evaluate its remaining brands, Mulally said, while declining to comment on the future of its struggling Mercury brand.

We continue to look at our portfolio and brands as any good business does but we have nothing new to add today, he said.

A source familiar with the matter told Reuters on Thursday that Ford is considering a plan to drop Mercury, a brand developed in the 1930s whose sales and investment have plunged in recent years.

Ford, the only large U.S. automaker to avoid bankruptcy last year, borrowed more than $23 billion in late 2006, putting up nearly all of its remaining assets, including the familiar blue oval logo, to maintain a cash cushion for its turnaround.

The leveraging of its assets, and the government-supported reorganizations of General Motors Co and Chrysler Group LLC, left Ford with far more debt than its U.S. rivals, but it surprised analysts with a small profit in 2009 and a $2.1 billion profit in the first quarter.

We did it the old-fashioned way. We financed our plan ourselves, Mulally said. We did not need our precious taxpayer money.

Mulally said the company is in the early stages of reaping the benefits of using shared vehicle platforms and common parts globally, with the majority of improvement in profitability still to come.

The new Fiesta small car, which is slated to hit U.S. showrooms in June, will use 65 percent of common parts globally, while the share of common parts will exceed 80 percent for the new Focus small car and the Fusion mid-size sedan, Mulally said.

Anything that gets you scale absolutely helps you from a business standpoint, he said.

Mulally said he is closely watching the euro-zone debt crisis for any potential impact on sales in major markets like Spain, but he expects European governments to act decisively to limit the fallout.

I'm confident that the magnitude and the importance of this is well understood by the leadership, he said.

Separately on Friday, Ford sales analyst George Pipas said the automaker expects notable gains in May U.S. sales and said its U.S. market share is on track to rise for the 14th consecutive month, driven by strong demand for its F-series trucks and the Fusion sedan.

Industrywide, May sales are expected to come in slightly above the average selling rate of 11 million units from January through April, Pipas told reporters.

Automakers are due to report May sales results on June 2.

Ford's U.S. sales are up 34 percent in the first four months of the year from a year before, twice the 17 percent gain in industry sales over the same period.

(Reporting by Soyoung Kim and Kevin Krolicki; Editing by Gerald E. McCormick and Richard Chang)