MCA Net Is Up 26% in Quarter, Off 9% for Year

Despite a 26% increase in fourth-quarter earnings, MCA reported Thursday that its net income for 1987 fell 9% to $150.9 million. The company’s 12-month revenue rose 6% to $2.6 billion.

The giant entertainment company attributed the drop in 1987 net income to a $36.4-million loss in its toy products unit and also to increased interest expense. MCA paid $43.4 million in interest for the year ended Dec. 31, compared to just $7 million in the previous year. The company said interest payments increased largely due to borrowing for the acquisition of WOR-TV in New Jersey and the repurchase of some of the company’s shares in the latter part of 1986 and 1987.

Delays in Shipments

MCA said its problems in the toy business stemmed in part from delays in shipments of Gotcha products, which resulted in some cancellations of orders.

For the three months ended Dec. 31, MCA posted net income of $21.8 million, up from $17.3 million a year earlier. Revenue during the same period rose to $674.4 million, up 5% from $642.4 million.

Revenue from its theatrical motion picture business dropped 19% in the fourth quarter to $32 million. For the year, theatrical revenue dropped 31% to $194.8 million from $283.9 million a year earlier.

The company’s home video and pay television, studio tour and television operations each posted revenue increases for the quarter and the year. Home video and pay television revenue rose 22% to $303.5 million for the year.

Music entertainment revenue, which include fees for the domestic distribution of home video products, rose to $145.9 million for the fourth quarter, up from $138.9 million. Operating income, however, declined to $13 million, down from $15.8 million a year earlier. For the year, the music entertainment unit posted operating income of $40.9 million, up from $33.8 million.

Corporate general administration costs in 1987 rose 14% to $16.1 million, up from $14.1 million in the previous year.