US number-two automaker Ford raised its earnings forecast for the full year Thursday, citing strong worldwide sales gains and a better picture in the troubled European market. Ford\'s net profit for the third quarter fell to $1.27 billion ( 31 cents a share) from $1.63 billion a year ago, but that was mainly due to ongoing restructuring costs on its European program and lump-sum pension payouts to reduce longer-term liabilities. On an operating basis, earnings gained 16 percent to $1.82 billion, or 45 cents a share, handily beating forecasts of 37 cents. Volume and profit gains came in all regions, though operating margins fell in the all-important North America market. Improvements in Europe, which was mired in recession for most of the past year, were such that the company lowered its loss expectations for the region and confirmed it expects to return to profitability by 2015. \"Ford\'s record results in the third quarter show the strength of our One Ford plan around the world,\" said Alan Mulally, Ford president and chief executive. Total world sales in the quarter hit 1.55 million units, 16.3 percent higher than a year earlier, bringing revenues to $33.9 billion, up from $30.2 billion. “North America continues to achieve strong profits and we saw significantly improved results outside North America,” said chief financial officer Bob Shanks. \"We substantially reduced our losses in Europe, set a record third-quarter profit in Asia Pacific Africa and saw a $150 million improvement in South America.\" In Europe the company saw unit volumes increase to 310,000 from 295,000 a year ago, with revenues rising 12 percent to $6.5 billion. Shanks told analysts in a conference call that the company was progressing solidly in restructuring its European operations. Asked if Ford intended more layoffs and capacity reductions, he said: \"If we feel need to take extra action to deal with excess capacity we\'ll do that.\" \"But we\'re very comfortable with what we\'ve done in Europe,\" he said. In all the local markets on the continent, he said, \"We are seeing signs of stabilization and a return to growth in the near term.\" \"I wouldn\'t say that we turned a corner, but the environment in Europe may have turned a corner... We are working toward returning to profitability by mid-decade.\" Ford did not offer a specific figure for the full-year 2014, but said it firmly expected that pre-tax profit will beat 2012; previously the company said it expected \"equal to or higher than\" the previous year\'s gains. Mulally meanwhile brushed off reports that, amid expectations he will leave by the end of next year, he is being recruited by Microsoft to replace outgoing chief executive Steve Ballmer and might leave earlier. \"We don\'t comment on speculation,\" he said in a conference call. \"l am clearly honored and excited to continue to serve Ford.\" In an interview with AFP, Shanks said he was not a candidate and had \"no idea\" about the succession plan. \"It\'s a matter for the board,\" he said. Ford shares jumped after the earnings release, closing up 1.4 percent at $17.76.