Nov. 8 (Bloomberg) -- Ford Motor Co. narrowed its loss to $380 million, beating analysts' estimates for the second straight quarter, as it boosted sales, pared costs through job cuts and decided to keep its Volvo unit.

The third-quarter results put Ford ``on track'' to return to profit in 2009, Chief Executive Officer Alan Mulally said on a conference call. He has trimmed 10,000 salaried positions, cut 23,000 North American factory jobs and shut two assembly plants at the second-biggest U.S. automaker this year.

Ford said it lost 19 cents a share, versus $5.2 billion, or $2.79, a year earlier. Excluding one-time costs, the loss was $24 million, or 1 cent a share, topping the average estimate of 47 cents in a Bloomberg survey of 14 analysts. Revenue rose 11 percent as a surge of sales in China helped offset a plunge in the U.S.

``It looks good; they beat estimates, they beat on the revenue side,'' said Mirko Mikelic, who helps manage $21 billion in fixed-income assets at Fifth Third Asset Management in Grand Rapids, Michigan. ``Those are pretty solid numbers.''

Ford said it completed a review of Volvo and decided that the unit will ``operate on a more stand-alone basis.'' Ford, which bought the Swedish automaker in 1999, will report Volvo's financial results beginning next year.

``The best thing we can do is improve the cost structure'' at Volvo, Mulally said. The automaker also said it will stick with plans to sell the U.K.-based Jaguar and Land Rover brands and expects to have an agreement by early 2008.

Shares

Ford, of Dearborn, Michigan, rose 24 cents, or 2.9 percent, to $8.48 at 4:01 p.m. in New York Stock Exchange trading. The shares have gained 13 percent this year.

Three months ago, Ford surprised investors with a $750 million profit, its first in two years.

``We can see our plan taking hold with significant improvement continuing in our core automotive operations,'' Mulally said in a statement.

Ford said its increase in revenue, to $41.1 billion, stemmed from higher overall prices and selling more-expensive versions of models. The weakening U.S. dollar reduced pretax profits by roughly $300 million, Chief Financial Officer Don Leclair said on the conference call.

Cash, UAW Agreement

Leclair also said Ford has reduced its expected spending for closing plants by as much as 29 percent and eliminated jobs while developing new cars and trucks.

The automaker last year borrowed $23.4 billion, pledging assets including its headquarters and blue oval trademark as collateral. At that time, Ford said it anticipated spending $17 billion of the proceeds by 2009. The tab will now be $12 billion to $14 billion, Leclair said.

A tentative agreement with the United Auto Workers union, reached last week, will improve Ford's ``competitiveness,'' Mulally said, declining to comment in detail until after UAW members vote on the four-year contract. Balloting is scheduled to be completed next week.

The accord calls for Ford to pay $13.2 billion into a union fund that will take responsibility for retiree health care. Ford also agreed to reduce the number of plants it plans to shut. In return, the union accepted lower wages for new workers, covering about 20 percent of factory jobs.

U.S. Loss, China Gain

Vehicle sales totaled 1.49 million, a 1.4 percent increase, including a 27 percent gain in China. Sales in the U.S., Ford's biggest market, dropped 18 percent to 600,310, according to figures from Autodata Corp. of Woodcliff Lake, New Jersey.

Ford's worldwide automotive business had a $362 million pretax loss, down from $1.9 billion. The North American auto unit, the main source of losses, had a $1 billion pretax deficit, about half of what it was a year earlier. The figures exclude costs Ford considers one-time items.

The Ford Motor Credit lending unit reported net income of $334 million, 26 percent less than the third quarter of 2006, due in part to an increase in borrowing costs and larger depreciation expenses.

Mulally is closing 10 plants and has cut thousands of jobs in an attempt to restore profitability after a $12.6 billion loss in 2006. He also has hired a new sales chief from Japan's Toyota Motor Corp. to shore up Ford's shrinking U.S. market share.

Ford has eliminated 33,600 North American factory jobs since the end of 2005, the company said in a slide deck prepared for a conference call about earnings.

Plant Closings

Earlier this year, the automaker trimmed 10,000 salaried jobs and closed two assembly plants, in Michigan and Virginia. Last year, Ford shut its St. Louis and Atlanta factories.

``Ford has another $2.7 billion of cost cuts in North America during 2008,'' Peter Nesvold, a New York-based analyst for Bear Stearns & Co., said in a note. ``Even into a highly challenging environment next year, this should support continued year-over-year earnings improvement.''

Ford derives about 38 percent of U.S. sales from big pickups and sport-utility vehicles, models most affected by rising gasoline prices. A U.S. housing slump also has curbed spending and kept away some truck buyers such as contractors. Ford is deliberately reducing some sales by scaling back low-profit deals with rental-car companies.

Tax Benefits

General Motors Corp., the world's largest automaker, yesterday reported a record $39 billion quarterly loss after three money-losing years forced the company to write down $39 billion of future tax benefits.

Ford addressed so-called deferred tax assets in last year's third quarter, spokeswoman Becky Sanch said. At that time, Ford wrote down the value of its tax deferred assets by $2.2 billion because of cumulative losses at the North American auto unit and at Jaguar and Land Rover.

The automaker hasn't reported a gain in domestic market share since 1995, when it accounted for one in every four cars and light trucks sold in the U.S.

U.S. market share for Ford, Lincoln and Mercury brands fell below the automaker's target of at least 14 percent. Mark Fields, chief of Ford's Americas unit, told reporters Nov. 5 that the company is stabilizing sales to individual customers.

Ford last month hired Jim Farley, one of Toyota's top U.S. marketing officials, to lead global marketing. Farley will also directly supervise Ford's U.S. sales and marketing efforts.

Ford's 7.45 percent note due July 2031 dropped 0.625 cent to 77 cents on the dollar, yielding 10 percent, according to Trace, the NASD's bond-price reporting service.

Credit-default swaps tied to Ford bonds gained 7 basis points to 727 basis points, according to CMA Datavision in London. An increase signals declining investor confidence in the company's ability to pay back its debt.

To contact the reporters on this story: Bill Koenig in Southfield, Michigan, at wkoenig@bloomberg.net; Greg Bensinger in New York at gbensinger1@bloomberg.net

Last Updated: November 8, 2007 16:30 EST