Volkswagen AG, New York Times Co and Air France SA are among more than 20 companies in the US and Europe that have reduced sales or profit forecasts since the war in Iraq began, blaming weak consumer spending.
Volkswagen, Europe's largest carmaker, will slow production at its main factory in Germany.
New York Times Co, publisher of the largest US daily newspaper, said advertising sales are falling.
Air France plans to reduce its seating capacity by 7 percent, joining other airlines worldwide in scaling back flights.
Uncertainty about the war, along with higher energy costs, have helped to push the University of Michigan's consumer sentiment index to its lowest in a decade, threatening to stall a recovery from the US recession that began in March 2001.
"Is there a risk of another recession? I'd bet even money on it right now," said Allan Meyers, who helps manage US$35 billion at Fifth Third Asset Management.
More companies are likely to reduce profit estimates than at any time since the terrorist attacks of September 2001, said Chuck Hill, research director at Thomson Financial, which tracks earnings estimates.
In one telling signal, US companies issued 2.7 times more negative earnings pre-announcements than positive during the first quarter, compared with 1.6 in the year-earlier period, Hill said.
Analysts now predict that profit among companies in the Standard & Poor's 500 Index will rise 8.1 percent in the first quarter, down from a 17.4 percent estimate in October.
Airlines and hotel companies, facing a drop in passenger bookings they estimate at 10 percent, have been hardest hit.
Alitalia SpA, Europe's sixth-biggest carrier, said Friday it may not make a profit this year, two days after Air France told investors that its annual profit may decline.
In the US, AMR Corp's American Airlines may seek bankruptcy protection by April 7, people familiar with the matter have said. Northwest Airlines Corp and Continental Airlines Inc are cutting 6,100 jobs between them, adding to 98,000 jobs eliminated after the Sept. 11 attacks.
"We're facing the obliteration of the travel industry as we know it," said Richard Aboulafia, director of aircraft consulting at the Teal Group in Virginia.
Hilton Hotels Corp, the third-largest US hotel owner, said it expects to break even or make only 1 cent a share in the first quarter, less than a US$0.05 forecast two months ago. Starwood Hotels & Resorts Worldwide Inc, owner of the Sheraton and Westin chains, withdrew its annual earnings forecast.
A slowdown in advertising sales is hurting newspapers, including the New York Times and McClatchy Co, publisher of the Sacramento Bee. McClatchy said first-quarter earnings may be at the low end of its earlier estimates.
Ethan Allen Interiors Inc, a furniture retailer, blamed the war for denting consumer confidence and contributing to unchanged sales in the quarter ending March 31.
Volkswagen said it expects no growth in US and European vehicle markets this year, partly because of war concerns.
"We're preparing for difficult times," Peter Hartz, the management board member responsible for personnel, told workers at the plant in Wolfsburg, Germany, last week.
Other companies weren't as pessimistic.
General Motors Corp said demand held up better than it expected after the Iraq war began. Wal-Mart Stores Inc, the world's largest retailer, said the effects have been "minimal." Federated Department Stores Inc, parent of the Macy's chain, said it doesn't see a severe drop in sales.
Some companies may exaggerate the war's effects to compensate for their own mistakes or unrelated industry turmoil, Hill said.
Computer companies, including Oracle Corp and Gateway Inc, said two weeks ago that war worries led customers to cut back on spending. The more likely cause is a hangover from the late 1990s binge of computer buying, analysts said.
"It doesn't make you look bad if you're blaming this external thing rather than anything at the company," Hill said.
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