Ford posted 2009 net income of $2.7 billion, ending three straight annual losses, and forecast a 2010 pretax operating profit as Chief Executive Officer Alan Mulally reaped the benefits of his recovery plan.

Fourth-quarter earnings were $868 million, or 25 cents a share, compared with a year-earlier net loss of $5.98 billion, or $2.51, Ford said Thursday.

Excluding one-time costs, profit was 43 cents a share, beating analysts' estimates, and the shares rose.

The full-year profit was Mulally's first since coming from Boeing in 2006. Dearborn, Mich.-based Ford gained U.S. market share for the first year since 1995 with new models such as the revamped Taurus sedan while the predecessors of General Motors and Chrysler reorganized with federal aid.

"Ford is well along the road in their turnaround," said John Wolkonowicz, an analyst at IHS Global Insight in Lexington, Mass.

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"They did it without government help and by themselves. That's giving them the highest consideration and public acceptance they've had in decades."

Analysts expected an adjusted fourth-quarter profit of 26 cents a share, based on the average of 12 estimates compiled by Bloomberg. For 2010 operating profit, analysts had expected $3.57 billion, the average of five estimates. Ford hadn't provided a 2010 outlook before Thursday, and didn't give a number.

"This is a real step forward," Chief Financial Officer Lewis Booth said of the 2010 projection, reiterating Mulally's timetable to have Ford "solidly profitable in 2011."

Mulally, 64, has focused on refreshing Ford's lineup, including adding small cars, while working to slash costs. He pared the North American workforce by about 47 percent, sold the Jaguar, Land Rover and Aston Martin luxury brands, and is near a sale of the Volvo unit to Zhejiang Geely Holding Group Co.

The Volvo deal may close next quarter, Ford said Thursday. Ford and Hangzhou, China-based Geely aim to reach an agreement before mid-February, according to three people familiar with the negotiations.

Ford's 2009 profit followed a record net loss of $14.7 billion a year earlier. Full-year 2009 operating profit was $454 million, compared with an average estimate of a loss of $1.02 billion from five analysts.

Automotive debt, which excludes Ford Motor Credit, was $34.3 billion at year's end, an increase from $26.9 billion on Sept. 30, the company said. Booth said Ford will take steps such as last year's debt restructuring to reduce its obligations, without elaborating.

"We're not kidding ourselves," Booth told reporters in Dearborn. "We know we have a huge amount of debt and an uncompetitive balance sheet."

Ford managed to avoid the bankruptcies that befell its U.S. rivals by borrowing $23 billion in late 2006 before credit markets froze. The automaker put up all major assets, including the Ford name, as collateral to build a cash cushion to withstand losses while developing new models.

"The turnaround is still not a slam dunk because of challenges from competitors and the economy," said Efraim Levy, a New York-based equity analyst for Standard & Poor's. "But clearly they are making progress."

A recovery in auto demand may help the company in 2010, with Ford saying today that industrywide U.S. light-vehicle sales may rise to a range of 11.3 million to 12.3 million from last year's 10.4 million. Counting medium- and heavy-duty trucks, the 2010 tally may be as much as 12.5 million.

Ford boosted first-quarter North American production to 570,000, an increase of 20,000 vehicles from a plan announced in December.

Ford also said it will pay profit sharing of about $450 to each of its 43,000 U.S. hourly workers represented by the United Auto Workers union. Ford said it won't award performance bonuses to salaried employees for 2009, though it is reinstating merit- pay increases in 2010 for white-collar workers.

The UAW is protesting the raises for salaried employees and has accused the automaker of violating a pledge to provide an equality of sacrifice among all workers.