Newspaper article THE JOURNAL RECORD

Big Three Automakers' Earnings Roll Slows Down

Newspaper article THE JOURNAL RECORD

Big Three Automakers' Earnings Roll Slows Down

Article excerpt

DETROIT - The Big Three automakers' earnings roll is slowing down.

After setting earnings records in three of the last four quarters, analysts expect General Motors Corp., Ford Motor Co. and Chrysler Corp. will announce second-quarter earnings slightly lower than a year ago, reflecting a softening U.S. car and truck market.

But, they add, it's no time to panic.

``I don't think there's that much importance that's going to be placed on earnings comparisons with last year,'' said auto analyst Charles Brady of Oppenheimer & Co. of New York.

``Earnings last year were exceptionally strong, and this year all we've heard about is weakness,'' he said.

The Big Three's roll of quarterly earnings records began in the second quarter last year when the companies reported earnings of $3.49 billion, or $7.14 a share. That was followed by a record third-quarter report of $1.83 billion and a record fourth quarter in which the companies made $3 billion.

The Big Three earned $3.54 billion in the first quarter of this year, second only to the record of $3.87 billion posted in the first quarter of 1984.

GM and Ford tentatively have scheduled their earnings reports for the middle of next week and Chrysler's is due July 31.

Surveys of analysts' predictions show GM will report second-quarter earnings around $2.17 a share, Ford will show a per-share profit of about $3.10, and Chrysler will have a profit of $1.50 a share.

Those estimates compare with second-quarter, per-share earnings last year of $2.26 for GM, $3.43 for Ford and $1.45 for Chrysler.

The industry began to soften early this year. Car and truck sales for the Big Three during the first half of the year were down 6.5 percent from last year.

``What's more important is the level of profitability the Big Three will demonstrate given this weak setting,'' Brady said.

Some observers say the market is saturated by the 80 million or so new cars that have been sold during the last five years.

The automobile industry also has been hit by expectations of slower economic growth, fluctuations in interest rates and consumer indifference to recent sales incentives. …

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