NEW YORK (CNN/Money) - Ford Motor Co. reported a third-quarter profit Wednesday that drove far past Wall Street's most optimistic expectations, although it put the brakes on its fourth-quarter earnings outlook.

The world's No. 2 automaker earned $220 million, or 12 cents a share, excluding special items, an improvement from the loss of $502 million, or 28 cents a share, on the same basis a year earlier. Analysts surveyed by earnings tracker First Call had a consensus forecast of 3 cents a share, with a range of 1 to 5 cents.

The company said it now expects full-year earnings per share of 40 cents, excluding special items. That's only 1 cent a share better than the year-to-date earnings, suggesting near-breakeven results in the fourth quarter, when analysts expected EPS of 13 cents. The 40 cents also is below the consensus full-year EPS forecast of 43 cents, although it is within the range of estimates from 35 to 55 cents.

Shares of Ford (F: down $0.19 to $8.68, Research, Estimates) lost about 3 percent Wednesday morning following the report.

In a conference call detailing results, Chief Financial Officer Allan Gilmour attributed the anticipated weaker fourth-quarter results to a combination of seasonal factors and costs associated with some planned model changes for the Ford F-series pickup and its luxury Jaguar unit.

Including special items, such as a charge for the sale of its Kwik-Fit unit and a change in accounting practices, the company reported a net loss of $326 million, or 18 cents a share, an improvement from the loss of 29 cents a share a year earlier.

Ford lost money on its core automotive operations, but the losses were narrower than a year ago. Profits from its credit and Hertz car rental units lifted the company into the black.

Worldwide automotive operations lost $243 million in the quarter, compared with a loss of $877 million a year ago. North American automotive operations posted the biggest improvement, cutting losses to $50 million from $849 million a year earlier, while losses widened in both Europe and South America. Auto operations elsewhere in the world posted a $66 million profit, up from a $52 million profit a year earlier, due primarily to results at Japanese automaker Mazda, which is owned by Ford.

Worldwide revenue rose to $39.6 billion from $36.55 billion a year earlier as the number of vehicles sold increased 9 percent to 1.7 million from 1.5 million.

Ford executives said they were pleased with gains in market share, particularly in retail sales in the core North American market, where it reached 22.5 percent in September, up from 19.5 percent in the first quarter. They also said the company is hitting the cost reduction targets set earlier this year as part of a revitalization plan following a money-losing 2001.

"Our main message is the plan is working and we're gaining momentum," CEO William Clay Ford said.

The company said pension fund underfunding reached $6.5 billion at the end of the third quarter due to a 15 percent decline in fund assets year-to-date. But Gilmour said the company is not required to make any contributions to the fund until 2006 under federal pension regulations, although he expects to make contributions well before then.

"Ford is in better shape than most," he said. "Our [underfunding] numbers are big because we're a big company. We are not in bad shape in the pension business. The pension business is a long-term business."