GENERAL MOTORS Earnings don't meet expectations

The company lowered its earnings forecast for the year.
DETROIT (AP) -- General Motors Corp.'s earnings rose an unexpectedly slim 3.5 percent in the third quarter, hurt by continued use of costly incentives to lure American buyers and poor results in Europe, where it plans to slash operations and 12,000 jobs. Its global automotive business lost $130 million in the quarter.
The world's largest automaker also lowered its earnings forecast for the year Thursday, a few hours after announcing it plans to cut roughly 20 percent of its work force in Europe by the end of 2006 in hopes of saving about $600 million a year.
Also Thursday, Standard & amp; Poor's lowered its long-term credit rating on GM and related entities to "BBB-minus," its lowest investment-grade rating. The move could raise borrowing costs for GM.
The automaker's shares fell $2.46, or 6 percent, to close at $38.84 Thursday.
Earnings
GM earned $440 million, or 78 cents a share, in the July-September period, far below the Wall Street consensus of 96 cents a share compiled by Thomson First Call. The results compare to $425 million, or 79 cents a share, in the year-ago period.
Revenue rose 3 percent in the quarter to $44.9 billion from $43.5 billion a year ago.
In a report, S & amp;P said its ratings downgrade primarily reflects heightened concerns about profit potential for GM's automotive business. In addition to increased offerings from domestic and foreign competitors, soaring oil prices raise the risk of a market shift away from sport utility vehicles and pickups, which S & amp;P said "contribute a highly disproportionate share of GM's automotive profitability."