Majority of Area’s Biggest Companies Report Higher Profits

Nearly 60% of the largest public companies based in the San Fernando Valley area posted higher profits in their most recently completed quarters, with insurance firms showing the biggest gains.

Among the 53 companies surveyed, 30 reported higher profits than in the same period last year while eight posted lower net income. Another 15 firms lost money, but six of them narrowed their deficits from a year before.

The survey took into account the results of public companies with headquarters in the area extending from Burbank to Camarillo. The quarterly results generally were for three-month periods that ended in May or June.

Almost all of the area’s handful of biggest companies reported higher profits. Walt Disney, the Burbank-based entertainment giant, reported an 52% increase in earnings, to $79.7 million. It cited a strong showing by its Disneyland and Walt Disney World theme parks.

MCA, the Universal City-based entertainment conglomerate, said its net income jumped 129%, to $28.2 million, largely attributed to profits from its filmed-entertainment division.

Lockheed Posts 10% Increase

Calabasas-based Lockheed, an aerospace concern that is the biggest company in the Valley area, reported a 10% increase in earnings, to $96.0 million. The gain was attributed to lower interest expenses and higher profits in its aeronautical systems unit and its missiles, space and electronics systems unit.

The only one of the Valley area’s top 10 firms to lose money was Tandon, a Chatsworth computer products company that posted a $20.3-million shortfall. The company, which posted a loss of $15.0 million in the same quarter last year, attributed its deficit to disk-drive manufacturing difficulties and the expense of moving into the personal computer business.

The generally strong results notwithstanding, several major companies posted lower earnings.

Micom, a Simi Valley maker of computer communications equipment that suffered from the computer industry’s downturn, said its profit was off 30%, to $1.7 million. American Ecology, a Calabasas waste-management company, said its earnings fell 28%, to $700,000, because of new laws that increased the cost of disposing of low-level radioactive wastes.

Also, Zero Corp., a Burbank maker of enclosures and accessories for electronic equipment, posted an 8% decline, to $2.6 million. It cited uncertainty over tax legislation and the computer-industry slump.

Despite that slump, some large computer-related companies reported gains. Dataproducts, a Woodland Hills computer-printer maker that has cut costs sharply in the past year, showed a $2.5-million profit, a reversal from a loss of $19.4 million a year earlier.

Micropolis, a Chatsworth disk-drive maker, reported its earnings soared more than ninefold, to $4.4 million. It recently has been the area’s most profitable computer-related company because of strong demand for its high-capacity computer memory equipment.

Insurance companies’ profits were up, but not necessarily because of gains in their insurance operations. 20th Century Industries in Woodland Hills, the parent of 20th Century Insurance, reported a 17% increase in profit, to $6.9 million, despite an operating loss of $199,000. The company’s net income was boosted by $7.3 million in investment income.

Zenith National Earnings Up

Likewise, Zenith National Insurance’s earnings soared 503%, to $14 million, even though its primary business--workers’ compensation insurance--was off. The Encino-based company attributed its improved results to its acquisition last year of Cal Farm Insurance, a property-casualty firm in Sacramento.

Burbank-based Fairmont Financial, which has shown big gains partly because it has been writing more workers’ compensation insurance, was up 151%, to $2.0 million. Republic American, an Encino workers’ compensation firm that went public in July, was up 264%, to $17.1 million. Investment income and securities sales accounted for $12.1 million of Republic’s profit.

Banks and savings and loan associations generally reported strong quarterly results. S&Ls; such as Van Nuys-based Valley Federal Savings & Loan, the Valley area’s biggest financial institution, benefited from lower interest rates. Declining rates fatten the spread between the amount of money that thrifts receive from loans and pay out on customers’ deposits.

Valley Federal reported net income of $4.1 million, up 48%.

Encino-based Independence Bank, the largest bank based in the Valley area, said its net income was up 114%, to $801,434, mostly because of new loans and reduced loan problems.

Defense-Related Activities

Among defense-related businesses, TransTechnology reported a 46% increase in net income, to $534,000. The Sherman Oaks-based aerospace concern cited its recent acquisition of Lundy Electronics & Systems of Glen Head, N.Y.

Sierracin, a Sylmar aerospace and electronics company, reported a $118,009 profit, a reversal from a $715,000 loss a year earlier, in part because of increased marketing and cost controls.

Another company that posted a turnaround was Olson Industries, which divested much of its egg operation but kept its profitable plastics packaging business. It reported a $256,000 profit, a reversal from a $1.2-million loss a year earlier.

Several major companies haven’t reported results for their most recently completed quarters. They include Redken, a Canoga Park hair-care and cosmetics firm, which reported an 89% decline in earnings, to $147,000, in the quarter ended April 30.

During the same three-month period, House of Fabrics, a Sherman Oaks-based chain of fabric stores, reported a 61% increase in profit, to $1.2 million, while Nu-Med, an Encino hospital chain, posted a $1.9-million loss, down from a $1.9-million profit a year earlier.

QUARTERLY PROFITS Results are for quarters ended in June.

Net Income % Company (loss) Change Dataproducts $2.5 million N/A Walt Disney 79.7 million +52 Fairmont 2.0 million +151 Independence Bank 801,434 +114 Lockheed 96.0 million +10 MCA 12.3 million +129 Micom Systems 1.7 million -30 Micropolis 4.4 million +812 Newhall Land 9.6 million +63 Olson Industries 256,000 NA Republic American 17.1 million +264 Superior 2.7 million +19 Tandon (20.3 million) NA 20th Century 6.9 million +17 Valley Federal 4.1 million +48 Zenith National 14 million +503 Zero 2.6 million -8