Most Valley-Area Companies Post Healthy Earnings Gains
Their stock prices have taken a drubbing thanks to the Oct. 19 market crash, but most publicly held companies in the San Fernando Valley area are still doing at least one thing stockholders want: making more money than last year.
Of 47 publicly held companies that reported quarterly results in August through October, 27 firms (or 57%) reported higher profits or profits compared to year-earlier losses. Eleven companies reported their earnings dropped, with nine companies reporting losses.
Companies surveyed are those with corporate headquarters from Burbank to Camarillo. Nearly all of the reporting periods were for quarters ended in September.
Walt Disney, the Burbank entertainment company, continues to be the most profitable company by far in the area. The company earned $135.3 million in its latest quarter, up 67% from a year earlier, largely because of strong results from its theme parks in Anaheim and Orlando, as well as higher profits from its film group. The company’s Touchstone Pictures has released such hits this year as “Stakeout” and “Can’t Buy Me Love.”
Meanwhile, rival MCA, the Universal City entertainment conglomerate, reported a 37% decline in profit to $46.8 million in its latest quarter, partly because of lower television earnings. And Lockheed, the giant Calabasas aerospace company, earned $101 million in its latest quarter, down 15% from a year earlier, because of interest expenses on debt from the company’s purchase last year of Sanders Associates in Nashua, N.H.
Three companies reported large losses because of one-time costs.
Price Pfister reported the biggest loss, $13.7 million, which was the result of a one-time bonus of $15.4 million in stock paid to seven of its top executives after Pfister, a Pacoima faucet maker, had its initial public offering of stock in August.
Dataproducts, a Woodland Hills computer printer maker, reported a $6.7-million quarterly loss because of costs involved with its July purchase of Imaging Solutions, a company that holds part of the rights to a new printing technology that Dataproducts sells. A year earlier, Dataproducts reported a $2.7-million profit.
And Olson Industries lost $1.8 million in its latest quarter, contrasted with a profit of $400,000 a year earlier. The latest results included a $1.1-million loss to dispose of its egg business, and a $654,000 loss from its business of making plastic packages.
For the most part, local companies continued to post jumps in earnings in their latest quarters even while their stocks fell.
Shareholders in Cherokee Group, the North Hollywood clothing and shoe firm, have seen their stock fall from a high of $25 a share this year to $6.25 now. Nevertheless, the company posted a 70% quarterly profit gain to $3 million.
High technology companies, whose stocks have been among the hardest hit, posted improved profits.
Micropolis, a Chatsworth maker of high-capacity disk drives used to store data in computers, reported that its earnings increased 43% to $7 million. Its stock, one of the hottest in the over-the-counter market earlier this year, has fallen from more than $44 a share to $17.50.
Micom, a Simi Valley maker of computer communications equipment whose stock last month fell to $6.75 from a high of nearly $50 three years ago, posted a 34% increase in earnings to $3.5 million as quarterly sales hit a record $52.8 million.
Tandon, a Chatsworth maker of personal computers and disk drives, earned a modest $965,000 in the third quarter. A year earlier, however, Tandon recorded a $45.3-million loss when the company had $28 million in inventory write downs and special charges. Nevertheless, the firm’s stock has been selling at about $2 a share, down from its high three years ago of more than $20.
Among manufacturing firms, Superior Industries, a Van Nuys maker of wheel rims for the Big 3 auto makers, posted a 21% increase in profit to $1.7 million on stronger sales. TransTechnology, a Sherman Oaks aerospace company that has been posting higher profits after acquiring New York-based Lundy Electronics last year, reported a 16% rise in profits to $2.4 million.
The larger financial institutions also fared well. Valley Federal Savings & Loan reported that its earnings rose 14% to $5 million because of higher fee income from making new home loans. Lincoln Bancorp, parent of Lincoln National Bank in Encino, reported its third-quarter profit doubled from a year earlier to $592,470. The company has been making more money partly because its loan portfolio is dominated by business loans that carry variable interest rates. As interest rates have climbed, so have Lincoln’s profits.
Results for local insurance companies were skewed by gains from investments.
Zenith National Insurance, an Encino workers’ compensation company, reported its overall net income dropped 2% to $11.8 million because its year-earlier earnings were boosted by gains from investments. The company’s earnings from operations rose 24% to $11.1 million.
Republic American’s net income also fell 11% to $7.1 million from a year earlier. But last year the Encino workers’ compensation insurer enjoyed a $2.3-million gain from the sale of bonds. In the latest quarter, on an operating basis, Republic’s earnings continued to climb, up 25% to $7.1 million.
And 20th Century Industries, parent of 20th Century Insurance, reported a net profit of $10.6 million, all of it attributable to investment income. On an operating basis, the Woodland Hills car and home insurer, lost $1.2 million because of increased payments for claims. A year earlier, 20th Century’s net income was $10.8 million.
QUARTERLY PROFITS
Results are for quarters ended in August or September.
Net Income Company (loss) % Change* Cherokee $3.0 million +70% Dataproducts ($6.7 million) N/A Walt Disney $135.3 million +67% Lockheed $101.0 million -15% MCA $46.8 million -37% Micom Systems $3.5 million +34% Micropolis $7.0 million +43% Olson Industries ($1.8 million) N/A Price Pfister ($13.7 million) N/A Superior Industries $1.7 million +21% Tandon $965,000 N/A TransTechnology $2.4 million +16% Valley Federal $5.0 million +14% Zenith National $11.8 million -2%
* From year earlier quarter
N/A: Not applicable
