Zero Corp. 3rd-Quarter Profit Declines 8%, but Sales Rise

Zero Corp. said it earned $3.5 million for its third quarter ended Dec. 31, down 8% from the record earnings it showed in the same quarter a year ago. Sales were $30.8 million, up 5%.

But the Burbank-based concern fared worse in its continuing operations, which earned $6.1 million before taxes in the quarter, against $10.0 million a year ago. The previous year’s third quarter was affected by an undisclosed gain, said to exceed $2 million, on the sale of Zero’s investment in Ocean Technology.

Net income per share was 28 cents against 31 cents in the previous period, when the company earned $3.8 million.

For the nine months, Zero earned $8.6 million, down 11% from $9.7 million a year ago. Sales rose 5%, to $94.6 million. Earnings per share were 69 cents against 78 cents.

Wilford D. Godbold Jr. the company’s president, attributed the lower earnings to continued weakness in the electronics industry, for which Zero makes cabinets, cases and other accessories.

Godbold said the company will continue to emphasize cost containment until the industry’s picture improves.

Nevertheless, Zero’s board voted to raise its quarterly cash dividend to 9 cents a share from 7.2 cents as part of a new policy to pay out 35% to 40% of earnings in dividends. Zero said the policy is the result of the lower corporate and individual tax rates contained in the Tax Reform Act of 1986.

The dividend will be payable March 9 to shareholders of record Feb. 13.