‘87 McDonnell Profit Increases to $313 Million
McDonnell Douglas earned $313 million on sales of $13.2 billion in 1987, up from earnings of $277.5 million on sales of $12.7 billion in 1986.
The company said, however, that $177 million of the annual profit was attributable to pension accounting changes and $77.6 million to conversion of leases on jetliners.
In its fourth quarter, McDonnell earned $92.6 million on sales of $3.5 billion, virtually unchanged from the 1986 profit of $92.6 million on sales of $3.5 billion.
Sales were higher during the quarter in the transport aircraft, space systems and missiles and information systems lines of business.
Aircraft Earnings Decline
But earnings in its important combat aircraft segment declined substantially as a result of production problems in the F-15 Eagle and F/A-18 Hornet programs. McDonnell took a pretax charge of $13.6 million for design and testing of modifications intended to reduce stress on the aft section of the F/A-18. Profit was also hurt by increased research and development spending on new fighter aircraft for the Air Force and Navy.
Meanwhile, earnings were sharply higher in the transport aircraft line, primarily because of a $40-million pretax gain from the sale of DC-9 jetliners to an airline that had been leasing them.
The fourth-quarter earnings increased about $27 million as the result of a decline in the corporate income tax rate.
Total backlog, including unfunded government orders, was $33.1 billion on Dec. 31, compared to $28.4 billion a year earlier. Employment at the end of 1987 was 112,400, compared to 105,696 at the end of 1986.