Marantz Expects Profit for 4th Quarter
Responding to increased trading in its stock, Chatsworth-based Marantz has said it expects to report operating earnings of $750,000 to $1 million for the fourth quarter ended Dec. 31, up from a break-even showing during the same period in 1984.
Marantz estimated its sales at $20 million for the fourth quarter, up from $14.5 million in the year-ago quarter, when it posted net income of $1.4 million. That net profit stemmed largely from an accounting adjustment resulting from the resolution of a tax dispute in Marantz’s favor.
The expected fourth-quarter results, if they stand, represent a turnaround for the troubled home electronics company, which has not had an operating profit since 1977. In the first three quarters of 1985, Marantz posted losses of $2.6 million on sales of $28.7 million.
Heavier Stock Trading
Since mid-January, trading in Marantz stock has picked up noticeably. Before then, the stock, which is traded on the New York Stock Exchange, typically had a daily trading volume of several thousand shares, and the price hovered around $3.75.
On Friday, Marantz stock closed at $5 on a trading volume of 34,000 shares. It was unchanged Monday on volume of 29,000 shares.
William Morris, the company’s chief financial officer, said he believes the stepped-up trading in Marantz’s stock was spurred by strong interest generated in the company’s new VCR and stereo products at the Consumer Electronics Show in Las Vegas earlier this month.
But Arthur Winston, who follows Marantz for Glickenhaus & Co., a New York brokerage firm, said he thinks the stock is busy because of the anticipated earnings, word of which, he said, leaked out.
Winston said Marantz’s products “are selling, but they’re nothing special.” He said Marantz is marketing a stereo through American Express, which advertised the system in a flyer included with its bills.
Marantz’s chairman, Joseph Tushinsky, and his brother, company President Fred Tushinsky, are pinning their turnaround hopes on Marantz’s new videocassette recorder. The company also has sold some assets and eliminated most of the debt from its balance sheet.
Over the years, however, Marantz has been hurt by a series of management miscues and other problems that at one point pushed it near insolvency.
