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Solid gains from its motion control business, coupled with a strong contribution from its newly acquired Schmitt Bretten heat exchanger unit, helped American Precision Industries Inc. boost its second-quarter profits by 25 percent, the company said Wednesday.

The improved profits gave American Precision its 16th straight quarter with earnings that have increased by at least 25 percent -- and its ninth straight quarter of record profits.

The Cheektowaga manufacturer of electronic components, heat transfer and motion technology equipment said its profits rose to $1.97 million, or 25 cents per share, from $1.57 million, or 21 cents per share, a year ago. The earnings topped the 23 cents per share that the lone analyst surveyed by IBES International Inc. had expected.

American Precision said its sales increased by 26 percent to $39.6 million from $31.4 million the year before, mostly because of higher revenues from its motion business and the acquisitions of Gettys Corp. for its motion control business in April 1996 and Schmitt Bretten in January.

Excluding the acquisitions, the company's sales from existing operations rose by 5 percent, or $1.6 million, during the quarter.

Nevertheless, Kurt Wiedenhaupt, American Precision's chairman, president and chief executive officer, said the quarter had its ups and downs. "The second quarter proved to be a challenge, but certainly a surmountable one," he said.

Weakness in the company's capital goods markets led to the layoff of 20 to 30 workers at its Basco division in Cheektowaga and the loss of another 10 to 15 jobs at its API-Ketema unit, said Deborah K. Pawlowski, an American Precision spokeswoman.

Those layoffs, coupled with a redesign in the way Basco produces one of its heat exchanger lines, are expected to save the company about $2.5 million a year. The new production method reduced that line's material costs by 20 percent, Ms. Pawlowski said. Basco employs a little less than 200 workers.

At the same time, the company's motion business increased its sales by 12 percent to $12.1 million because of the addition of new products and markets, while profit margins from those operations also strengthened, Ms. Pawlowski said.

Within the heat transfer business, the company's API Airtech unit, which moved into a new 82,000-square-foot plant that employs more than 200 people in Arcade earlier this year, enjoyed "rapid growth" during the quarter that offset the weakness at Basco, Ms. Pawlowski said. The acquisition of API Schmidt Bretten also contributed the increase in overall sales for the division.

The company's electronic components division had a "modest" increase in its overall sales and earnings, despite strong foreign competition, Wiedenhaupt said.

Wiedenhaupt also said he expects a turnaround at Portescap, the Swiss micro-motors manufacturer it acquired earlier this month. Portescap lost $2.3 million on $14.9 million in sales during the first quarter of this year, but Wiedenhaupt said the company's performance has improved since.

Since April, American Precision had been managing Portescap, which was profitable in 1995 and 1996, and has streamlined the firm's structure and been identifying ways to cut costs.

As a result, Wiedenhaupt said those moves, coupled with the sharing of sales channels, should allow Portescap to boost American Precision's profits.

The company booked $41.2 million in new orders during the quarter, up 35 percent from $30.5 million a year ago.

For the first half of this year, American Precision said its profits rose by 30 percent to $3.86 million, or 50 cents per share, from $2.97 million, or 40 cents per share, the year before. Sales grew by 41 percent to $75.4 million from $53.4 million.

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