Ford Motor Co. the second-largest U.S. automaker, may report its largest first-quarter profit since 1998 tomorrow as fuel-efficient new models helped sales gain amid surging U.S. gasoline prices.

Profit excluding some items may have climbed to 50 cents a share, according to the average of 14 analysts’ estimates, from 46 cents a year earlier. Net income may have risen to $2.1 billion, the average of three analysts’ estimates compiled by Bloomberg, and the most since a $17.6 billion profit in the first quarter of 1998.

Chief Executive Officer Alan Mulally has worked to boost fuel economy, and sales of more efficient new models such as the Fiesta subcompact and Explorer sport-utility vehicle have risen as gas prices gained this year. Investors remain concerned that surging fuel costs may hurt consumer confidence and car sales, said Gary Bradshaw, a fund manager at Hodges Capital Management.

“I don’t feel as good as I would if I was filling up at the pump for $2.89 instead of $3.89 a gallon,” said Bradshaw, whose Dallas-based firm owns about 200,000 Ford shares. “I still think Ford’s lineup will weather the storm. They’re better prepared this time.”

The rising gas prices have contributed to an 8.1 percent decline in Ford’s shares this year that was worsened by the automaker’s fourth-quarter profit trailing analysts’ average estimate by 38 percent, said Brian Johnson, a Chicago-based analyst with Barclays Capital.

“There’s a healthy level of worry out there,” said Johnson, who rates Ford “overweight” and predicts first- quarter profit of 57 cents a share. “It would be good for them to actually come in with a good number. It would be helpful in putting to rest fears” about fuel prices and the March 11 earthquake in Japan.

While the quake has prompted Ford to sporadically shut down some factories to conserve components that are in short supply, Mulally has said the disaster won’t affect earnings.

“Even though we might slow down or even stop temporarily some of these specific operations, it would have no material impact,” he told reporters in Detroit on April 13. “We have not said anything about any of this affecting our earnings.”

Mulally said Ford is better able to cope with rising fuel prices than in 2008, when an overdependence on trucks and sport- utility vehicles hurt the automaker’s sales as U.S. gasoline peaked at $4.11 a gallon. Regular unleaded gasoline averaged $3.84 a gallon in the U.S. on April 20, a 34 percent gain from a year earlier, according to AAA.

Ford, which had $30.1 billion in losses from 2006 through 2008, earned $6.56 billion last year as Mulally expanded the lineup with a focus on fuel economy. The Fiesta gets as much as 40 miles per gallon in highway driving, and the redesign of the Explorer sport-utility vehicle boosted its fuel efficiency about 30 percent, Mulally said.

Explorer sales more than doubled in the first quarter, and Fiesta deliveries in March were more than twice its sales in January.

“With the fuel prices moving up, we now have the vehicles that people want,” Mulally said. “The largest vehicles are slowing down a little bit, but all these smaller ones from Ford are now available.”

Ford rose 34 cents, or 2.3 percent, to $15.43 in New York Stock Exchange composite trading on April 21. The shares gained 68 percent in 2010.

Ford may benefit from the earthquake because it is having a greater impact on the production of Japanese automakers such as Toyota Motor Corp., Johnson said. That will give Ford an opportunity to sell more of its new small models and command higher prices because fuel-efficient cars are in short supply.

“We estimate Toyota’s production will be cut by more than 50 percent, which creates a share gain and pricing opportunity for Ford,” Johnson said. “Ford has better cars and better price points on their product line” than during the last fuel price surge in 2008.

The average price consumers paid for Ford’s models rose 2.6 percent in the first quarter, George Pipas, the automaker’s sales analyst, said on an April 1 conference call. Consumers paid an average of $31,508 for Ford models in the first quarter, a 3.9 percent gain from $30,319 last year, according to Santa Monica, California-based researcher Edmunds.com.

“We’re fairly comfortable that their earnings power will be turning around,” said Johnson, who estimates share gains and higher prices may add $1.6 billion to Ford earnings this year.

Ford fell short of its U.S. retail market share goal in the first quarter, according to the automaker’s federal filings. Ford had 13.6 percent of the U.S. retail auto market in the quarter, which excludes sales to fleet buyers, trailing the 14.1 percent target set by the company’s board.

Ford’s total U.S. market share fell to 16.2 percent from 16.8 percent, according to Autodata Corp. of Woodcliff Lake, New Jersey. Ford’s U.S. sales rose 16 percent in the first quarter, excluding the Volvo Cars unit it sold last year, and trailed the industrywide gain of 20 percent, Autodata said.

Ford, which surpassed General Motors Co. (GM) in sales in March for the second time in 13 years, won’t resort to heavy discounts to reverse its share losses, Mulally said. GM increased sales incentives 11 percent in the first quarter, while Ford reduced them 9.1 percent, according to Autodata.

“The most important thing about our plan is profitable growth,” Mulally said. “We will always be very disciplined about our production and our pricing and have the pricing reflect the real demand and inherent value of the product.”

Ford’s pretax profit may rise to $2.24 billion in the first quarter, from $2.14 billion last year, according to the average of five analysts’ estimates. Revenue may fall to $30.8 billion, the average of eight analysts’ estimates, from $31.6 billion last year.

Ford avoided the government bailouts and bankruptcies that befell the predecessors of GM and Chrysler Group LLC in 2009. Ford borrowed $23 billion in late 2006, after Mulally arrived from Boeing Co. and before credit markets froze. The automaker put up all major assets as collateral, including the Ford logo, and used the funds to develop the more fuel-efficient lineup.

“I’m betting with Ford management, that they’ve made the right calls for the long term and have good products,” Bradshaw said. “These higher prices for oil may be here forever and we’re just going to have to deal with it.”