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Less Gusto For Profits This Time Around


News: Analysis & Commentary: CORPORATE PROFITS

LESS GUSTO FOR PROFITS THIS TIME AROUND

Despite some standouts, the second quarter wasn't superb

Will the second quarter keep up the pace of 30% earnings growth of 1997's first three months? So far, the answer appears to be no. That's the signal from the 80 companies in BUSINESS WEEK's flash report on second-quarter profits, which rose 8%, while sales were up 7%. What happened? Despite standout reports from Intel, Ford, and General Electric, other companies brought down the average with disappointing returns and write-downs. Chrysler Corp.'s earnings fell 53%, because an engine-plant strike cost an estimated $438 million. At International Paper Co., a $419 million loss included $535 million in pretax charges. There was good news in tech stocks (see below). But overall, investors will have to wait a while longer for another profit blowout.Return to top

TABLE

A Sampling of First-Quarter Profits

CURRENT QTR. EST RE-

QTR. SALES % PROFITS % EPS PORTED

(MILLIONS) CHG.(MILLIONS)CHG. (5/15) EPS DIFF.

CORPORATE PROFITS

INDUSTRIALS 188,963.4 +3 11,080.9 +5 0.87 0.94 +0.07

ABBOTT LABORATORIES 2,900.4 +7 521.5 +11 0.68 0.68 --

ALCOA 3,432.0 +1 207.6 +57 1.16 1.19 +0.03

BLACK & DECKER 1,182.2 -2 45.5 0 0.46 0.47 +0.01

BOISE CASCADE 1,333.0 +6 -16.2 NM -0.49 -0.53 -0.04

CHRYSLER 14,388.0 -9 483.0 -53 1.30 1.33* +0.03

CINCINNATI MILACRON 452.1 +10 18.2 +24 0.43 0.45 +0.02

COCA-COLA ENTERPRISES 2,905.0 +44 111.0 +88 0.25 0.29 +0.04

CONAGRA ** 5,795.3 +1 186.5 NM 0.80 0.81 +0.01

CORNING 1,031.1 +13 127.0 +35 0.44 0.56 +0.12

CPC INTERNATIONAL 2,104.5 -3 -4.1 NM 1.11 .04* -0.07

CROWN CORK & SEAL 2,286.6 -3 132.0 +27 1.05 0.98 -0.07

CUMMINS ENGINE 1,396.0 +6 53.0 +20 1.22 1.39 +0.17

EASTMAN KODAK 3,853.0 -6 368.0 -16 1.38 1.12 -0.26

FORD MOTOR 40,265.0 +3 2,530.0 +33 1.53 2.06 +0.53

GENERAL DYNAMICS 1,032.0 +11 80.0 +19 1.19 1.28 +0.09

GENERAL ELECTRIC 21,997.0 +16 2,162.0 +13 0.65 0.66 +0.01

GENERAL MOTORS 45,146.0 +1 2,098.0 0 2.65 2.68 +0.03

GEORGIA-PACIFIC 3,326.0 0 27.0 +170 0.24 0.30 +0.06

HARLEY-DAVIDSON 444.1 +13 49.2 +23 0.63 0.65 +0.02

INLAND STEEL INDUSTRIES 1,321.2 +14 40.1 +19 0.59 0.77 +0.18

INTERNATIONAL PAPER 5,000.0 -2 -419.0 NM 0.14 0.20* +0.06

JOHNSON & JOHNSON 5,698.0 +6 909.0 +15 0.68 0.68 --

NIKE ** 2,373.9 +28 155.8 +16 0.71 0.52 -0.19

NORTHROP GRUMMAN 2,087.0 -3 100.0 +16 1.57 1.72 +0.15

PFIZER 2,913.0 +9 457.0 +16 0.36 0.35 -0.01

PHELPS DODGE 1,065.0 +11 134.8 +7 1.89 2.16 +0.27

REYNOLDS METALS 1,783.0 -2 55.0 -8 0.73 0.76 +0.03

TEMPLE-INLAND 907.9 +3 15.6 -56 0.23 0.28 +0.05

TEXTRON 2,667.0 +12 145.0 +16 0.84 0.85 +0.01

TRW 2,852.1 +11 134.4 +15 1.03 1.06 +0.03

WEYERHAEUSER 2,909.0 +1 109.0 +6 0.27 0.47* +0.02

WHIRLPOOL 2,117.0 -7 65.0 +25 0.86 0.86 --

SERVICES 55,583.1 +16 7,133.7 -1 0.92 0.89 -0.03

AMR 4,710.0 +4 302.0 +3 3.31 3.26 -0.05

BANKAMERICA NA NA 799.0 +11 1.04 1.07 +0.03

BARNETT BANKS NA NA 157.0 +13 0.80 0.80 --

BOISE CASCADE OFFICE 600.5 +30 11.7 -14 0.23 0.19 -0.04

PRODUCTS

CALIBER SYSTEM 574.7 -7 13.6 NM 0.44 0.34 -0.10

CHASE MANHATTAN NA NA 925.0 +8 2.06 2.11* +0.05

CITICORP NA NA 1,024.0 +8 2.08 2.10 +0.02

DOW JONES 640.7 +2 34.9 -33 0.35 0.36 +0.01

ENRON 3,240.0 +9 -420.0 NM 0.49 0.40* -0.09

FEDERAL EXPRESS ** 3,068.3 +12 132.6 +15 1.06 1.14 +0.08

FIRST CHICAGO NBD NA NA 378.0 +5 1.19 1.20 +0.01

FOOD LION 2,324.7 +12 49.7 +2 0.11 0.11 --

GRAINGER (W. W.) 1,051.2 +18 57.6 +16 1.06 1.13 +0.07

HERTZ 976.3 +7 53.9 +36 0.43 0.50 +0.07

KROGER 6,231.8 +7 108.1 +38 0.40 0.41 +0.01

MARRIOTT INTERNATIONAL 2,878.0 +22 83.0 +11 0.61 0.61 --

MCGRAW-HILL 836.7 +18 65.2 +14 0.60 0.65 +0.05

MERRILL LYNCH 8,011.0 +29 481.0 +11 0.91 1.24 +0.33

MORGAN STANLEY, 3,517.0 +12 527.0 -7 0.84 0.50 -0.34

DEAN WITTER

MORGAN (J. P.) NA NA 374.0 -15 1.94 1.85 -0.09

NATIONSBANK NA NA 762.0 +26 1.00 1.02 +0.02

ROADWAY EXPRESS 609.4 +14 7.8 +92 0.42 0.38 -0.04

RYERSON TULL 730.0 +20 19.1 +1 0.45 0.49 +0.04

SAFETY-KLEEN 229.9 +9 13.3 -2 0.22 0.23 +0.01

SAFEWAY 5,249.2 +33 134.1 +26 0.54 0.54 --

SALLIE MAE 937.7 +6 119.2 +16 2.05 2.20 +0.15

TIME WARNER 3,193.0 +49 30.0 NM -0.15 -0.09 +0.06

TRAVELERS GROUP 5,973.1 +10 662.9 +15 0.92 1.00 +0.08

WELLS FARGO NA NA 228.0 -37 3.81 2.49 -1.32

TECHNOLOGY 36,204.3 +13 3,504.6 +40 0.84 0.77 -0.07

ADVANCED MICRO DEVICES 594.6 +31 10.0 NM 0.21 0.07 -0.14

AMGEN 620.5 +9 200.5 +12 0.71 0.72 +0.01

APPLE COMPUTER*** 1,737.0 -20 -56.0 NM -0.55 -0.44 +0.11

COMPAQ COMPUTER 5,012.0 +25 214.0 -20 1.38 1.48* +0.10

EATON 1,909.0 +7 126.0 +22 1.44 1.64 +0.20

GENENTECH 233.5 -4 23.8 +10 0.24 0.19 -0.05

HONEYWELL 1,977.3 +12 98.4 +18 0.77 0.77 --

HUGHES ELECTRONICS 4,755.7 +17 541.4 +77 0.62 0.55* -0.07

INTEL 5,960.0 +29 1,645.0 +58 1.08 0.92 -0.16

MOTOROLA 7,521.0 +10 268.0 -18 0.58 0.44 -0.14

RAYTHEON 3,324.7 +6 209.5 0 0.89 0.89 --

TEXAS INSTRUMENTS 2,559.0 +7 224.0 +446 0.84 1.07* +0.23

UTILITIES & TELECOM 20,028.5 +11 1,791.0 +15 0.65 0.67 +0.02

AMERITECH 3,986.0 +6 537.0 -5 1.12 1.13* +0.01

COLUMBIA GAS SYSTEM 810.7 +39 34.9 +326 0.43 0.63 +0.20

FPL GROUP 1,587.1 +8 170.1 +9 0.90 0.95 +0.05

GTE 5,692.0 +8 671.0 +5 0.72 0.70 -0.02

LUCENT TECHNOLOGIES*** 6,340.0 +18 213.0 +196 0.25 0.33 +0.08

PUBLIC SERVICE 1,320.0 -1 106.2 -18 0.53 0.39 -0.14

ENT. GROUP

TELLABS 292.7 +54 58.8 NM 0.28 0.32 +0.04

*** Third-quarter results ** Fourth-quarter results NM = not meaningful

NA = not available *EPS adjusted for special items

DATA: STANDARD & POOR'S COMPUSTAT, A DIVISION OF McGRAW-HILL INC. EARNINGS

ESTIMATE DATA PROVIDED BY I/B/E/S INTERNATIONAL INC., NEW YORK, N.Y. I/B/E/S IS

A REGISTERED TRADEMARK OF I/B/E/S INTERNATIONAL INC.

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