The U.S. flag and flags of other countries fly outside Ford headquarters in Dearborn, Mich. Ford Motor Co. said Monday that it made nearly billion in the third quarter, fueled by U.S. market share gains, cost cuts and the government’s Cash for Clunkers rebates.

San Francisco ? Ford Motor Co. shares jumped more than 8 percent on Monday after the automaker reported a surprising third-quarter profit and painted a rosier outlook for 2011.

Ford stock closed up 58 cents at $7.58 and has now soared more than 245 percent in the past year.

The Dearborn, Mich.-based company said it swung to a profit of $997 million, or 29 cents a share, from a loss of $161 million, or 7 cents a share, a year ago.

On an after-tax basis, excluding special items, Ford posted an operating profit of $873 million, or 26 cents a share, compared with a loss of $3 billion, or $1.32 a share, a year earlier.

The period marks Ford’s first pre-tax operating profit since the first quarter of 2008.

Still, revenue fell to $30.9 billion from $31.7 billion.

Analysts polled by FactSet Research were looking for a loss, on average, of 13 cents a share on revenue of $29.1 billion.

“While we still face a challenging road ahead, our transformation is working and our underlying business continues to grow stronger,” CEO Alan Mulally said in a conference call. Mulally grew up in Lawrence and is a Lawrence High School and Kansas University graduate.

Ford ended the quarter with $23.8 billion of gross cash, up $2.8 billion from the end of the second quarter.

For 2010, Ford said it may face a substantial decrease in European industry volume amid an uncertain outlook for the economy.

The drop in European business could more than offset U.S. sales volumes, which may improve somewhat from this past quarter’s levels, the company said.

Ford reiterated its industry U.S. sales target of about 10.6 million cars and trucks in 2009 while raising its outlook for Europe to 15.7 million.

Based on its recent performance and present planning assumptions, Ford said it now expects total company and North American Automotive operations to be “solidly profitable” for 2011 on a pre-tax basis excluding special items, with positive automotive operating-related cash flow.

Its outlook was previously “breakeven or better” for those operations.

Gimme Credit high-yield analyst Shelly Lombard said she is concerned about the long-term impact of labor costs and Ford’s debt load, but otherwise praised the report.

“Ford’s recent operating performance and balance sheet restructurings have improved its cash burn, set the stage for future capital markets transactions, and greatly improved the company’s near-term outlook,” she said.

Ford, which has drawn praise for avoiding government aid and bankruptcy, will unveil its October sales results today along with the rest of the auto industry. Edmunds.com is looking for Ford to report a 3.5 percent decline in vehicle sales.

In September, Ford, as it has managed to do often this year, fared better than the other six major manufacturers with a 5.1 percent dip.

A strong product lineup drove recent market-share gains in North America, South America and Europe as well as continued improvements in transaction prices and margins, the company said.

Ford now sees full-year automotive structural-cost reductions of about $5 billion, exceeding its 2009 target.

Efforts to whittle labor costs further were stymied last week when Ford’s union members rejected a concessions deal, leaving the company at risk to higher costs compared with rivals Chrysler and General Motors.