Three months ago, I got some danders up among the Ford (NYSE:F) faithful by suggesting that the company's "2005 Financial Milestones" were a bit optimistic. Yet within just two months, Ford proved me right in part, revising its earnings forecast to say that profits would fall toward the bottom of its predicted $1.75 to $1.95 range.

On Friday, after the markets were safely closed to disappointed investors, Ford dropped the other tire. The company recanted its full-year target and predicted roughly 25% fewer profits than it had believed it could earn as recently as January: $1.25 to $1.50 per share. What's more, none of those profits are coming from car sales per se.

Now, perhaps you're under the impression that Ford is a car company. If so, it's an easy mistake to make. After all, the place you most often see the company's trademark blue oval is indeed on the front grill of a snazzy F-150 or a somewhat less snazzy Taurus. But the fact is, Ford is no car company. It's a bank. As proof, take a look at Ford's pre-tax profit forecast for its automotive division, and I quote: "2005 automotive pre-tax profits to be break even at best." In other words, far from being a profit driver, Ford's car-building business is turning into a drag on the earnings of its profitable banking business.

The reason? In a continuing effort to move product and retain market share, Ford's giving away the store. For three years running, Ford has tossed fiscal prudence (and cash rebates) to the wind. To maintain sales levels and protect market share from similarly cash-happy rivals GM (NYSE:GM) and DaimlerChrysler (NYSE:DCX), Ford offers sizeable incentives on new car sales. But consider: When Ford lists a car at $17,000 and then incentivizes it down to $15,000, it makes a sale more likely today with the consequence that that sale will not occur tomorrow.

That would be fine if both hypothetical sales generated the same profit, but that's not what happens. Today's sale generates $2,000 less profit than tomorrow's might have. Investors should therefore take particular note of the line from the press release in which Ford's CEO declared that the company "will not mortgage Ford's future."

Because that's precisely what it is doing.

Fool contributor Rich Smith has no position in any company mentioned in this article.