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To: Peter V who wrote (14296)	10/9/2000 5:21:59 PM
From: Peter V	Respond to of 18998

Auto Suppliers again, with a chart biz.yahoo.com Monday October 9, 3:22 pm Eastern Time Auto suppliers seen posting lower Q3 results By Todd Nissen DETROIT, Oct 9 (Reuters) - Deflated by the Firestone tire recall and a weak euro, third quarter earnings for the nation's auto suppliers are projected to be down from last year as a group, according to analysts. As of late last month, half of the sector had issued earnings warnings as the ripple effect of the tire recall crisis facing No. 2 automaker Ford Motor Co. (NYSE:F - news) spread throughout the industry amid already lackluster third quarter production schedules. Also weighing on the sector was the weakness of the euro versus the dollar, higher energy prices and rising interest rates, analysts said. Based on guidance from executives, analyst estimates for the group fell 27 percent from previous levels, said Robert W. Baird analyst David Leiker. Suppliers as a group are now expected to post earnings 5 percent below a year ago, compared to results that were up 8 percent in the second quarter, and up 18 percent in the first, he said in a research note. Many suppliers were affected by Ford's decision to close three light truck factories for three weeks in August and September so it could use its new-tire supply for the recall replacement effort. The plant action cost the industry about 35,000 units. Firestone, a unit of Japan's Bridgestone Corp. , recalled 6.5 million tires, most of them on Ford Explorers, in August because of fears they shred and cause deadly highway accidents. Affected suppliers include Visteon Corp. (NYSE:VC - news), the former Ford internal parts unit that relies on Ford for about 85 percent of its revenues. Other suppliers that have put out warnings are Toledo, Ohio-based Dana Corp. (NYSE:DCN - news); Southfield, Mich.-based Federal-Mogul Corp. (NYSE:FMO - news), and Lear Corp. (NYSE:LEA - news); Cleveland, Ohio-based TRW Inc. (NYSE:TRW - news); Troy, Mich.-based ArvinMeritor (NYSE:ARM - news) and Grand Rapids, Mich.-based Tower Automotive Inc. (NYSE:TWR - news). Salomon Smith Barney analyst Matthew Stover said other factors negatively affected third quarter profitability, including softness in North American commercial business and weakness in the aftermarkets in North American and Europe. Adding to the pressure, he said, were slow and volatile third quarter production schedules that were uncertain even before the Firestone fallout. September output was projected to fall 8 percent from a year ago, leading to a 3 percent decline for the third quarter, analysts said. That represents the first year-to- year quarterly production decline since the first quarter of 1996, not including strike-years. ``September turned out to be a tough month,'' Stover said. ``Weakness could last into the first half of 2001.'' A fourth quarter production forecast from General Motors Corp. (NYSE:GM - news), which some analysts consider shaky, could hurt No. 1 supplier Delphi Automotive Systems Corp. (NYSE:DPH - news) going forward. GM is Delphi's largest customer. Analysts have also voiced concern about the euro and peso unfavourably affecting Delphi in the future. Milwaukee, Wis.-based Johnson Controls Inc. (NYSE:JCI - news), however, recently said it expects its fiscal fourth quarter earnings to exceed analysts' estimates. It cited operating margin improvements by its automotive and controls businesses and a strengthened financial position. ``What separates Johnson Controls from the group is its lack of exposure to aftermarket and heavy duty trucks and limited exposure to the Ford Explorer and Ranger,'' PaineWebber analyst Greg Kagay said. ``But everyone still has to deal with the euro,'' said Kagay, who looks for a profitability rebound in 2001 for many top suppliers as capacity constraints ease. The following are the consensus estimated earnings for selected auto parts suppliers for the latest quarter as compiled by First Call/Thomson Financial versus year ago results. (All data are for the third quarter unless otherwise noted.) COMPANY SCHEDULED Q3 2000 YEAR AGO QTR Delphi Oct. 11 $0.26 $0.24 Dana Corp Oct. 17 $0.42 $1.03 Gentex Corp. Oct. 17 $0.22 $0.19 TRW Inc. Oct. 18 $0.81 $1.18 Visteon Automotive Oct. 19 $0.37 N/A* Johnson Controls (Q4) Oct. 19 $1.59 $1.38 Tower Automotive Oct. 19 $0.27 $0.44 Federal-Mogul Corp. Oct. 19 $0.01 $1.01 Park-Ohio Industries Oct. 19 $0.23 $0.36 Borg Warner Oct. 23 $0.95 $1.02 Lear Corp. Oct. 24 $0.56 $0.58 American Axle Oct. 25 $0.48 $0.50 Dow Chemical Oct. 26 $0.45 $0.48 ArvinMeritor (Q4) Nov. 8 $0.41 N/A** Magna International not determined $0.99 $0.89 Visteon was spun off from Ford Motor Co. in June 2000. *Arvin Industries and Meritor Automotive merged in July 2000.