Control Data Reports Loss; Tandy Earnings Slide 65%
Control Data said it lost $9.2 million in the first quarter, in part because of problems in the computer maker’s financial-services unit.
Tandy Corp., meanwhile, said its fiscal third-quarter profits plummeted 65% from a year earlier, reflecting a write-down in the value of one of its personal computers.
Control Data said its loss compared to a profit of $31.7 million in the first three months of 1984, when net income included an $11.9-million gain from the sale of a building. First-quarter revenue inched up to $1.20 billion from $1.19 billion.
The company said its loss included a one-time after-tax charge of $11.6 million related to Ohio’s recent savings and loan crisis.
Control Data’s Commercial Credit unit owns City Savings & Loan of Lima, Ohio, which stands to lose the $21.4 million it contributed to the state’s insurance fund for thrift deposits. That fund was depleted when Home State Savings Bank in Cincinnati collapsed last month, triggering the crisis.
But Control Data said its computer business also struggled. Within that segment, “particularly in the peripheral products business (such as data storage devices), shipment rescheduling and cancellation of previously placed orders adversely affected first-quarter profitability,” it said.
Last month, Control Data cited its earnings slump in announcing that it plans to sell some businesses, as yet unidentified, and cut its work force.
Tandy, a personal-computer and electronics concern, said its profit for the third quarter ended March 31 tumbled to $21.9 million from $62.6 million in the same period a year earlier. Sales edged up 2% to $670.5 million.
Tandy’s earnings have been under pressure for several quarters, in part because of severe price cutting in the personal-computer industry and costs of introducing new products.
In the latest quarter, Tandy--which operates the Radio Shack chain of electronics stores--took a write-down of $18.3 million in the value of certain computer equipment and software, notably that associated with the Tandy 2000 microcomputer.
