LOS ANGELES _ Ford Motor Co. reported a giant annual profit, but much of the gain came from a special tax allowance, and the company said its operating earnings were hurt by losses in Europe and Asia and rising commodity prices.

The automaker reported an annual operating profit of $8.8 billion, almost 6 percent above the prior year. Full-year net income reached $20.2 billion, a 48 percent gain. That included a special one-time, non-cash accounting change from the reversal of Ford's deferred tax assets.

Ford's fourth-quarter operating profit fell almost 15 percent, to $1.1 billion, or 20 cents per share, from $1.3 billion, or 30 cents a share, from the fourth quarter of 2010. Analysts were expecting earnings per share of 25 cents. Its fourth-quarter revenue rose 6 percent to $34.6 billion.

"You can't sugar-coat the quarter. They came up short. But you have to be encouraged by the outlook," said Jefferies & Co. analyst Peter Nesvold.

Despite the problems in Europe and elsewhere, Ford said it expects this year's profits to be level with 2011.

Commodity price increases are expected to ease, and that should help profit margins, Nesvold said.

"The fear was that 2010 and 2011 might have been the peak in Ford's profit margin cycle, but management is sticking its neck out and is saying that they can do better," Nesvold said.

As in earlier quarters, Ford continues to do best in North America, its core market. The automaker reported an operating profit of $889 million for the region, compared with a profit of $670 million a year ago.

But it continues to struggle in Europe, losing $190 million, almost four times what it lost in the same quarter a year earlier. The European debt crisis is damaging the region's economy and will make it hard for Ford and its rival automakers to make money there this year.

Ford's losses in South America widened and it also posted a loss of $83 million in Asia _ in part because of the floods in Thailand _ compared with a profit of $23 million in the same period a year earlier.

Despite the problems, analysts said Ford was navigating difficult waters successfully and was continuing to improve its business.

Ford's ability to operate profitably represents the success of its strategy started in 2006, when the company mortgaged most of its assets to borrow $23.5 billion. It used the funds to restructure the business so that it could weather the economic downturn and eventually return to a growth mode.

Ford sold 2.1 million vehicles in the U.S. market last year, an 11 percent increase. It was the No. 2 seller, posting a 16.8 percent share of the market and trailing only General Motors Co.

The upswing is translating into more jobs. Ford said earlier this year that it would hire about 5,000 workers at its U.S. factories.

Workers will also get a slice of the automaker's profits.

Ford said it is making profit-sharing payments to about 41,600 U.S. hourly employees under its collective bargaining agreement with the UAW. The workers are receiving about $6,200. Based on the company's financial performance during the first half of last year, the workers received $3,750 each in December. Now they will get an additional $2,450 each based on the financial results of the second half of the year.

The automaker also has whittled away at its debt, slicing it to $13.1 billion by the end of the year, down from $19.1 billion at the end of 2010. Ford said its automotive operations have built up $22.9 billion in cash, up more than $2 billion from the prior year.

In October, ratings company Standard & Poor's raised Ford's corporate credit rating to BB+ from BB-. That put the company just one notch below an investment-grade rating, which is an important measure of corporate health and would reduce the automaker's borrowing expenses.

Ford has reinstated a quarterly dividend and will pay 5 cents a share to holders of Class B and common stock as of Jan. 31. The payment will be made March 1.