GOOD MORNING. Stocks in Asia closed mixed today; U.S. futures are pointing to a lower open.

BMW likes to say it makes the world’s ultimate driving machines. But the steep downturn in global auto sales—especially for pricey luxury models—suggests it may be a while before traders see the company as the ultimate profit machine again.

The German automaker reported a 74% decline in third-quarter earnings today, eking out profits of 78 million euros, down from 298 million euros a year ago, and below forecasts of a 94 million euro profit. Revenues were also down sharply, falling 6.6% to 11.8 billion euros, and earnings before interest and taxes slid 86% to 55 million euros. The company said in a statement that it’s seeing some signs of stabilization, but added "it cannot be assumed that an enduring recovery has taken hold." BMW’s shares were trading 6% lower in Europe today. And analysts weren’t impressed. The results were “quite disappointing,” says auto analyst John Buckland of MF Global in London, who has a neutral rating on the stock.

Indeed, BMW’s weak results contrast starkly with the news out of Ford Motor (F). The healthiest U.S. automaker, Ford issued a surprisingly solid quarterly report yesterday, posting a net profit of nearly $1 billion for its July-September period. The company also said it expects to be solidly profitable in 2011, and the upbeat forecast sent its shares soaring over 8%. Ford has been aggressively downsizing and is benefitting from a much lower cost structure. But its results may also reflect a general downsizing to less expensive, smaller vehicles.

That downsizing is likely to end as the recession continues to recede, points out Buckland, and companies like BMW should see sales improve as consumers get back to pricier midsize and larger vehicles. Companies can’t “save their way to prosperity,” he adds. “You need revenue growth.” But for now at least, traders seem to like the auto makers that are finding ways to cater to cash-strapped Americans.

IN OTHER NEWS:

Everyone’s got to eat – but do they have to eat Kraft Foods (KFT)? Analysts are expecting the company to report earnings of 48 cents a share when the market closes, up from 44 cents a share in the same quarter a year ago. Revenue is expected to be $10.32 billion, 1.4% below the year-ago quarter.

Today’s report is a crucial one for the company as it pursues what is expected to become a hostile bid for Cadbury (CBY). Kraft’s $16.7 billion September bid (which was rejected by Cadbury’s board), offers a mix of cash and stock, so any uptick in its share price would strengthen that offer. Management should offer some kind of commentary on this potential deal today, says Timothy Ramey, an analyst with D.A. Davidson & Co.

A big deal like this carries plenty of risk, and Kraft’s track record on mergers and acquisitions “is not great,” Ramey says. “Confectionary is an attractive business, but buying your way into an attractive business is usually a difficult way to go,” he says.

For this quarter, lower prices on agricultural commodities have given a boost to many companies in the food and restaurant sectors, and Kraft should be no exception. Despite the uncertainty around the potential Cadbury deal, Kraft’s sales should have stabilized, and the company remains a growth prospect, Ramey says. Investors will get more clarity on the health of Kraft’s own business – and its pursuit of Cadbury’s – this afternoon.