UPDATE 1-Lower tax rate fuels Ford beat, seen lifting full-year profit

(Adds details of results, outlook, stock action)

DETROIT, July 26 (Reuters) - Ford Motor Co on Wednesday reported a better-than-expected quarterly net profit due to a lower tax rate and increased sales of more profitable pickup trucks in the U.S. market, and the company said that reduced tax rate would boost its full-year profits.

But the No. 2 U.S. automaker also leaned heavily on consumer discounts during the quarter and the cost of its inventories rose, and the company warned that its full-year automotive operating margin and cash flow would be lower than in 2016.

Ford's results come at a time when the U.S. auto industry is bracing for a downturn after four consecutive months of declining sales. Analysts are concerned about the high discounts automakers are using to sell their vehicles and high supplies of unsold vehicles.

Rival General Motors Co on Tuesday reported a better-than-expected quarterly profit helped by cost-cutting and promised to scale back production to cut its burgeoning inventories in the second half of the year.

Ford said that for the full year it now expects adjusted earnings per share in a range from $1.65 to $1.85, above the $1.51 expected by Wall Street, according to Thomson Reuters I/B/E/S.

But Chief Financial Officer Bob Shanks said this would be largely due to a tax rate of 15 percent for the year as Ford pulls forward deferred tax losses from outside the United States. Wall Street had expected an effective tax rate of 30 percent for 2017.

The Dearborn, Michigan-based company reported second-quarter net income of $2.04 billion, or 51 cents per share, up from just under $2 billion, or 49 cents per share, a year earlier. Excluding one-time items, the No. 2 U.S. automaker reported earnings per share of 56 cents, and on that basis analysts, on average, looked for 43 cents.

In pre-market trading, Ford shares were down 2 cents from Tuesday's official close at $11.25. (Reporting by Nick Carey; Editing by Jeffrey Benkoe and Nick Zieminski)