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UPDATE 3-Ford profit beats forecasts on record N.America margins

* Ford posts profit of 40 cents/shr vs Street 30 cents/shr

* Vehicle prices up $800 mln in Q3 worldwide

* North American earnings offset European weakness

* Ford sees at least $1.5 bln loss in Europe this year

DETROIT, Oct 30 (Reuters) - Ford Motor Co posted on Tuesday a third-quarter profit that trounced Wall Street forecasts, driven by higher vehicle prices and record profit margins of 12 percent in North America.

Worldwide, Ford earned $800 million more through price increases than it did last year. Half that jump came from North America, where Ford has earned more than $2 billion and posted margins over 10 percent for three quarters in a row.

The No. 2 U.S. automaker's strength in North America offset the effects of the sharp industry downturn in Europe, where Ford expects to lose at least $3 billion over the next two years, as well as its lagging position in growth markets, such as China.

Ford posted a pre-tax operating profit of $2.2 billion, or 40 cents per share, beating analysts' average estimate of 30 cents per share, according to Thomson Reuters I/B/E/S. In North America, Ford earned $2.3 billion with a 12 percent operating margin.

``Twelve percent segment margins is just insane,'' said Jefferies analyst Peter Nesvold, who has a ``buy'' rating on Ford.

North America will continue to ``carry the load'' for Ford as its units in Europe, Asia and South America find their footing and cement their market position, Chief Financial Officer Bob Shanks said during a call with analysts and reporters.

Operating margins in North America are unlikely to be as high in the fourth quarter due to higher spending in areas like engineering and advertising, Shanks said.

Ford's margin on its automotive business overall was 6.3 percent in the third quarter. Ford is aiming for overall margins of between eight and 10 percent by the middle of the decade.

In the third quarter, Ford lost $468 million in Europe. It earned $9 million in South America. It also earned $45 million in Asia Pacific and Africa, the first profit for that region since the second quarter of 2011.

Ford's strong showing in North America reflects the benefits of Chief Executive Alan Mulally's ``One Ford'' strategy to build more cars and trucks on five global platforms by the middle of the decade from the current nine platforms.

``We're at the relative start of that around the world, led by North America,'' Mulally said on a conference call.

EUROPE PLAN ECHOES U.S. TURNAROUND

Ford hired Mulally as CEO in 2006 to steer the automaker's turnaround in North America, which began in late 2005 with the ``Way Forward'' plan engineered by Mark Fields, who had led North and South American operations for 7 years.

From 2006 to 2009, Ford cut capacity in North America by a little more than one-fifth, Nesvold, the Jefferies analyst, has estimated. Higher prices garnered an additional $10 billion in revenue from 2006 to 2010.

Ford's restructuring during the U.S. auto industry's peak helped the company avoid the government financing needed to keep U.S. rivals, General Motors Co and Chrysler Group LLC , afloat in 2009.

This plan will serve as a blueprint for Ford's restructuring of Europe, although there are limits on how much Ford can draw from its past experiences, Shanks said. Ford of Europe is ``much, much leaner'' than the U.S. operations were in 2006, he said.

``Europe isn't North America,'' Shanks said. ``It clearly has excess capacity - which we're addressing - but if you look in other areas, it's very lean. We actually want and need to invest in other areas in the business to grow the top line.''

Last week, Ford announced three plant closures in Europe to cut costs by as much as $500 million. Executives also left open the possibility of further actions if a recovery in Europe fails to materialize.

Ford is taking steps to keep its European inventory at around 40 days supply, down from the typical 50 days, in line with tepid demand. Nevertheless, Ford is launching 15 new or refreshed models in Europe over the next five years.

In the first nine months of this year, Ford lost around $1 billion in Europe. Ford expects to lose at least $1.5 billion in the region this year, and another $1.5 billion in 2013.

Ford expects to U.S. industry-wide auto sales will be 14.7 million this year. It forecast European sales of about 14 million.

Ford's third quarter revenue fell 3 percent to $32.1 billion, better than the $30.9 billion expected by analysts. Net income in the quarter was about $1.6 billion, or 41 cents a share, on par with results from last year.