Ford Profit Plummets 68% for Quarter : Autos: But domestic operations show surprising gains. Redesign of models is cited as reason for decline.

Ford Motor Co. said earnings tumbled 68% in the third quarter and signaled that the redesign of some of its most popular models will hurt results well into next year.

Ford, the nation’s second-largest auto maker, said Wednesday that it earned $357 million, or 28 cents a share, in the quarter, compared to profit of $1.12 billion, or $1.04 a share, in the same period of 1994.

While the overall results were in line with Wall Street’s expectations, the company surprised industry analysts with news that its domestic auto operations posted a $187-million profit instead of an expected loss. The operations earned $553 million a year ago.

Sales rose slightly to $31.4 billion from $30.6 billion.

The Ford results rounded out a mixed quarter for the Big Three U.S. auto makers. General Motors Corp., the only auto maker to post an earnings increase, Tuesday reported profit of $642.4 million for the seasonally slow third quarter, up 16% from a year ago.

Last week, Chrysler Corp. reported a 46% decline in third-quarter profit to $354 million.

“We have two or three quarters of more difficult results compared with the prior year, and after that, there’s an opportunity for things to get a lot better,” Ford Vice President David McCammon told a news conference.

He said Ford’s fourth-quarter results are likely to be below the $1.57 billion the auto maker earned in the 1994 period, citing lost production and other costs associated with new-product launches.

Ford is grappling with model changeovers on nearly 40% of its North American and European product lines, including the Taurus, the most popular car in the United States, its popular F-150 pickup truck, as well as the Sable, Escort and Mercury Tracer.

Ford’s fourth-quarter production will be about 6% below year-ago levels, McCammon said.

Ford’s European automotive operations lost $320 million in the quarter, considerably higher than expected and much bigger than the $37-million loss recorded a year ago.

Ford blamed the loss on lower volume, new model costs and higher incentives, and McCammon said marketing costs in Europe are likely to remain high.

Analysts said they expect Ford’s woes in Europe to continue as launch costs for the redesigned Fiesta and new Galaxy minivan take their toll. With Europe’s big economies sluggish, demand remains anemic.

Unfavorable currency exchange rates, which have hurt Ford for several quarters, reduced third-quarter earnings by $100 million, or about 10 cents a share, McCammon said.

The auto maker is looking at ways to change that, including moving more production to lower-cost countries out of high-cost countries, such as Germany.

The company said sales to U.S. dealers in the quarter fell 12% to 869,000 units from 992,000 units. Worldwide vehicle sales were 1,435,000, compared with 1,576,000.

In North America, Ford expects its fourth-quarter incentives to remain at the $850 vehicle level, the level in the third quarter.

The auto maker’s Financial Services Group had record profit of $558 million, up from $505 million.

For the nine months, earnings fell 7% to $3.48 billion, or $3.13 a share, from $3.74 billion, or $3.50 a share. Sales rose 8% to $102.59 billion from $94.80 billion.

Ford’s stock fell 62.5 cents to close at $30.125 on Wednesday in New York Stock Exchange trading.