A Third Quarter Profit Preview: Not Half Bad

What do you call a quarter in which a Detroit auto maker actually posts a profit? Not bad. Chrysler Corp. wasn't the only company in BUSINESS WEEK's flash report on third-quarter profits to post an upside surprise. Wall Street had a neat three months, with both Merrill Lynch & Co. and PaineWebber Group Inc. beating forecasts. Yet the downside proved dramatic. AMR Corp., American Airlines' parent, took some bad blows, thanks to the summer's fare war. And IBM, of course, posted bad results. But take IBM out of the mix, and Wall Street analysts did a pretty good job of gauging the quarter's performance for the remaining 81 companies on our list. Consensus earnings estimates as of last Aug. 13--about midquarter--missed the mark by just a penny.

A THIRD-QUARTER PROFIT PREVIEW
      
                             Current          Current         Est.
                             qtr.             qtr.            EPS    Reported
                             sales      %chg. profits   %chg. (8/13) EPS     Diff.
      INDUSTRIAL             $100,680.7   +9  7,240.6   +2-   0.75   0.77   +0.02
      ALCOA                     2,381.7   -4     62.2   -18   0.78   0.72   -0.06
      AMERICAN CYANAMID         1,198.0   +7     60.9   +8    0.75   0.68   -0.07
      AMOCO                     7,261.0   +3    466.0   +61   0.66   0.94   +0.28
      AVON                        938.8   +9     53.9   +13   0.76   0.75   -0.01
      BLACK & DECKER            1,185.7   +8     12.1   +23   0.26   0.11   -0.15
      BOISE CASCADE               934.5   -8    -35.2   NM   -1.15  -1.11   +0.04
      BRISTOL-MYERS SQUIBB      3,102.6   +13   589.2   +5    1.21   1.14   -0.07
      CHAMPION INTERNATIONAL    1,259.2   +3     50.5   +380 -0.13   0.47   +0.60
      CHRYSLER                  9,216.0   +22   202.0   NM    0.20   0.62   +0.42
      COCA-COLA                 3,507.5   +11   540.6   +18   0.42   0.41   -0.01
      CORNING                   1,162.0   +20   106.5   +2    0.60   0.56   -0.04
      CPC INTERNATIONAL         1,601.5   +8    117.4   +10   0.77   0.76   -0.01
      CUMMINS ENGINE              903.6   +6     14.0   NM    0.83   0.69   -0.14
      GENERAL DYNAMICS          1,661.0   +16    62.0   +55   1.99   1.95   -0.04
      GENERAL ELECTRIC         15,137.0   +6  1,110.0   +7    1.31   1.30   -0.01
      GEORGIA-PACIFIC           3,061.0   +3    -37.0   NM    0.07  -0.43   -0.50
      GILLETTE                  1,249.2   +10   128.2   +23   0.56   0.58   +0.02
      GREAT LAKES CHEMICAL        374.9   +14    60.0   +53   0.85   0.84   -0.01
      JOHNSON & JOHNSON         3,480.0   +12   425.0   +17   0.64   0.65   +0.01
      KELLOGG                   1,670.7   +11   204.2   +18   0.84   0.86   +0.02
      LOCKHEED                  2,474.0   +4     86.0   +6    1.42   1.40   -0.02
      MAYTAG                      735.5   +1    -50.2   NM    0.26  -0.47   -0.73
      MERCK                     2,464.3   +16   644.5   +17   0.56   0.55   -0.01
      OWENS-CORNING               786.0   +5     32.0   +23   0.90   0.75   -0.15
      PEPSICO                   5,640.0   +16   425.7   +49   0.51   0.53   +0.02
      PFIZER                    1,827.6   +3    297.5   +8    0.95   0.88   -0.07
      PHILIP MORRIS            15,005.0   +9  1,291.0   +16   1.46   1.44   -0.02
      RUBBERMAID                  473.5   +10    52.6   +14   0.32   0.33   +0.01
      TEXACO                   10,005.0   +7    269.0   -6    0.99   0.94   -0.05
      
                             Current          Current         Est.
                             qtr.             qtr.            EPS    Reported
                             sales      %chg. profits   %chg. (8/13) EPS     Diff.
      SERVICE                 $30,254.5   +5  1,641.3   NM    0.37   0.52   +0.15
      AMR                       3,725.0   +6    -85.0   NM    0.15  -1.13   -1.28
      BLOCKBUSTER ENT.            283.8   +24    41.3   +51   0.21   0.22   +0.01
      CAPITAL CITIES/ABC        1,215.3    0     62.2   +15   3.89   3.74   -0.15
      CHEMICAL BANKING               NA   NA    282.0   +35   0.86   0.98   +0.12
      CHEMICAL WASTE MGMT.        394.0   +16    38.7   +17   0.21   0.19   -0.02
      CITICORP                       NA   NA    116.0   NM    0.28   0.17   -0.11
      CONSOLIDATED FREIGHTWAYS  1,037.8   +2      3.0   NM    0.19  -0.05   -0.24
      DUN & BRADSTREET          1,190.4   +8    150.0   +11   0.86   0.84   -0.02
      KROGER                    6,333.1   +2      6.9   -59   0.21   0.08   -0.13
      LIZ CLAIBORNE               618.3   +11    64.5   -2    0.78   0.77   -0.01
      MARRIOTT                  1,948.0   +6     26.0   +44   0.19   0.21   +0.02
      McGRAW-HILL                 532.7   +9     61.1   +11   1.26   1.25   -0.01
      MERRILL LYNCH             3,390.2   +12   230.1   +44   1.60   2.05   +0.45
      NATIONSBANK                    NA    NA   350.0   +332  1.10   1.40   +0.30
      PAINEWEBBER                 836.5   +3     51.7   +35   0.66   1.06   +0.40
      SAFEWAY                   3,455.5   -2     20.0   -62   0.30   0.17   -0.13
      SCHWAB (CHARLES)          196.8     -3      7.8   -41   0.43   0.20   -0.23
      TIME WARNER               3,246.0   +10     6.0   NM   -1.42  -0.41   +1.01
      UNION PACIFIC             1,851.0   +6    185.0   NM    0.93   0.91   -0.02
      WELLS FARGO                    NA   NA     24.0   -72   1.42   0.21   -1.21
      
                             Current          Current         Est.
                             qtr.             qtr.            EPS    Reported
                             sales      %chg. profits   %chg. (8/13) EPS     Diff.
      TECHNOLOGY               42,274.1   +6 -1,613.7   NM    0.67  -0.55   -1.22
      ADVANCED MICRO DEVICES      356.7   +23    49.1   +188  0.30   0.51   +0.21
      APPLE COMPUTER**          1,767.7   +17    97.6   +20   0.90   0.81   -0.09
      COMPAQ COMPUTER           1,067.1   +50    49.4   NM    0.46   0.61   +0.15
      CONNER PERIPHERALS          625.5   +58    41.9   +141  0.61   0.79   +0.18
      DIGITAL EQUIPMENT*        3,314.3   +1   -260.5   NM   -1.28  -2.04   -0.76
      GENENTECH                   137.3   +2      7.7   -43   0.03   0.07   +0.04
      HONEYWELL                 1,550.0   +4    176.0   +123  1.24   2.54   +1.30
      IBM                      14,702.0   +2 -2,778.0   NM    1.07  -4.87   -5.94
      INTEL                     1,426.2   +20   240.8   +19   1.04   1.12   +0.08
      LOTUS DEVELOPMENT           206.7   -6     30.1   +40   0.32   0.72   +0.40
      MICROSOFT*                  818.0   +41   209.0   +45   0.68   0.70   +0.02
      MOTOROLA                  3,396.0   +24   129.0   +39   0.96   0.97   +0.01
      POLAROID                    514.1   +8     27.7   -95   0.48   0.59   +0.11
      RAYTHEON                  2,214.0   -1    156.1   +5    1.24   1.16   -0.08
      TANDY*                    1,160.1   +10    32.1   -23   0.30   0.40   +0.10
      TEXAS INSTRUMENTS         1,892.0   +11    57.0   NM    0.59   0.58   -0.01
      TRW                       2,020.0   +7     49.0   +53   0.77   0.77      --
      UNISYS                    2,067.5   +5     58.3   NM    0.13   0.17   +0.04
      WESTINGHOUSE ELECTRIC     3,039.0   -11    14.0   NM    0.41   0.00   -0.41
      
                             Current          Current         Est.
                             qtr.             qtr.            EPS    Reported
                             sales      %chg. profits   %chg. (8/13) EPS     Diff.
      UTILITIES & TELECOM.     35,181.9   +2  3,539.4   0     0.82   0.78   -0.04
      AMERICAN ELECTRIC POWER   1,282.0   -1    123.3   -17   0.79   0.58   -0.21
      AMERITECH                 2,813.2   +4    330.5   -13   1.21   1.23   +0.02
      BELL ATLANTIC             3,167.0   0     392.9   +19   0.81   0.91   +0.10
      BELLSOUTH                 3,736.0   +3    385.6   +9    0.81   0.78   -0.03
      CENTEL                      299.8   +2     11.5   -60   0.16   0.13   -0.03
      COMMONWEALTH EDISON       1,708.9   -12   235.9   -35   1.54   1.02   -0.52
      GTE                       4,965.0   +2    500.0   +9    0.54   0.55   +0.01
      MCI COMMUNICATIONS        2,682.0   +11   154.0   +16   0.56   0.58   +0.02
      NYNEX                     3,324.7   +2    319.7   +10   1.59   1.55   -0.04
      PACIFIC TELESIS           2,512.0   +1    277.0   +1    0.74   0.70   -0.04
      PUBLIC SERVICE ENT. GROUP 1,249.3   -1    138.1   -18   0.79   0.59   -0.20
      SCECORP                   2,550.0   +13   272.3   +10   1.36   1.22   -0.14
      SPRINT                    2,330.4   +5    115.2   +19   0.47   0.52   +0.05
      US WEST                   2,561.7   -2    283.4   +5    0.72   0.69   -0.03
      NA=not available
      NM=not meaningful
      *  First-quarter results
      ** Fourth-quarter results
      DATA: STANDARD & POOR'S COMPUSTAT SERVICES INC., INSTITUTIONAL BROKERS ESTIMATE 
      SYSTEM, BW
      
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