Businesses in the San Fernando Valley and neighboring areas found it tougher to boost profits during the first three months of 1985 despite rising sales, according to a survey by the Price Waterhouse accounting firm.
Price Waterhouse's study reported that 60% of the companies it polled enjoyed higher sales in the first quarter than they had in the last three months of 1984. But the study also found that only 47% of the companies chalked up increased profits.
In the previous quarter, companies were better able to translate higher sales into higher profits. Price Waterhouse said that 53% of the businesses reported higher sales and 47% showed higher profits for the last quarter of 1984.
"There are some mixed signals here," said Rock Hankin, managing partner of Price Waterhouse's office in Woodland Hills.
"The markets are not growing as fast as the companies anticipated, and that's leading to price competition."
Hankin said price-cutting is the main reason that profits are being squeezed. In addition, he said, local companies were hurt by less-efficient production and competition from imports.