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Entertainment Firms Turn in Best Showing for Quarter

Times Staff Writer

San Fernando Valley-area companies posted mixed results in their most recently completed quarters, with entertainment companies showing the strongest profits and some large savings and loans posting declines in earnings.

Among financial results for 37 of the largest public companies in the area, 21 showed an increase in earnings, 12 posted lower earnings and four recorded losses. The companies are those with publicly traded shares and headquarters between Glendale and Camarillo. Nearly all of the fiscal quarters ended in December.

Lockheed, the Calabasas aerospace giant, said its profits fell 22% to $104 million because of $55 million in special charges against the company’s results. The charges were taken largely to reduce the value of investments in computer software companies and to settle an air-traffic control contract with Saudi Arabia.

Disney Profits

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Entertainment companies in the Valley area enjoyed healthy profits. In Burbank, Walt Disney Co.'s earnings, helped by higher profits for its theme parks and resorts, rose 48% from year-earlier levels to $148.3 million.

Videocassette sales of Steven Spielberg’s “E.T.--the Extra-Terrestrial” pushed MCA’s quarterly profit to a record $75.7 million, more than triple the Universal City entertainment firm’s profits in the same period a year earlier. MCA has never specified the videocassette’s total sales, although figures for the company’s video and pay television operations show revenue soared to $268 million in the quarter, up from $72 million a year earlier.

Dick Clark Productions, boosted by new television series and specials, reported a $738,000 profit, contrasted with a $1.2-million loss a year earlier for the Burbank company.

The biggest loser among all Valley area companies was Micropolis, a Chatsworth maker of computer disk drives that lost $15.1 million in the quarter. Micropolis and other disk-drive makers have suffered from intense competition, price-cutting and manufacturing glitches.

51% Rise on Higher Sales

Another high-tech company, Dataproducts Corp., reported a 51% jump in its profit from a year earlier, to $1.6 million. The Woodland Hills computer printer maker, which is being shopped around to potential buyers after an investment group bought more than 7% of the company’s stock, attributed the profit increase to higher sales.

Financial institutions reported mixed results, with Valley-area banks enjoying strong profits, whereas savings and loans continued to have problems.

Fast-growing Lincoln Bancorp, the Encino parent of Lincoln National Bank, reported a 78% rise in its profit to $1.4 million. Lincoln’s net interest income, or the amount of interest it earns minus the amount it pays for deposits, soared to $5.8 million from $4 million.

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The quarterly profit for Citadel Holdings, the Glendale parent company of Fidelity Federal Savings & Loan, fell 44% to $4.9 million, in part because of interest rates that increased its costs for money.

Meanwhile, Glenfed, the parent of Glendale Federal Savings & Loan, saw its earnings fall 27% to $35.2 million. Valley Federal reported a slim $116,000 profit, contrasted with a $2.4-million loss a year earlier.

20th Century Gains

Insurance results were mixed. 20th Century Industries, the Woodland Hills parent of 20th Century Insurance, reported its profit in the quarter more than quadrupled to $14.8 million from $3.1 million a year earlier.

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20th Century’s profits were helped by higher premiums, which boosted operating profits to $4.9 million, as well as by $15.2 million from investment income. The company said its premiums could be lowered, depending on the outcome of the legal challenges to Proposition 103, the insurance rate reduction initiative that passed last year.

Zenith National Insurance’s latest quarterly profit fell 20% to $9.2 million. The company’s results included a $974,000 loss on investments, contrasted with a gain of $358,000 a year earlier.

One of the area’s fastest-growing and most profitable companies continues to be Martin Lawrence Limited Editions. Profits of the Van Nuys chain of art galleries jumped 75% in its most recent quarter to $1.6 million.

Art on Monthly Payments

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The company, which is expanding rapidly, enjoys healthy profits in part because it buys art rather than selling it on consignment, which enables it to sell works after they have appreciated in value. The company also sells art on monthly installments, much like appliance stores sell refrigerators, which broadens its potential market.

Cherokee Group, a Sunland clothing firm that is being bought by an investment group that includes some of the company’s managers, reported that it lost $1.6 million in its latest quarter. Most of the loss stems from expenses involved in the pending $174-million buyout of the company.

Newhall Land & Farming, a real estate development concern whose profits fluctuate with house and land sales, reported that profits fell 38% in the quarter to $10.1 million from $16.3 million a year earlier.

Superior Industries, a Van Nuys maker of wheel rims, said its earnings rose 60% to $4.3 million as it continued to enjoy strong orders from car makers.

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Amgen, a Thousand Oaks biotechnology company, reported that its earnings plunged 50% to $177,000, mostly because of expenses stemming from the expected launching of its first commercial drug, an anti-anemia drug called erythropoietin. The company is expecting to receive federal approval shortly from the Food and Drug Administration to sell the drug.

QUARTERLY PROFITS

Profit Company Industry (loss) % Change* Amgen biotechnology $177,000 -50% Dataproducts cmpter prnters $1.6 million +51% Dick Clark Prods. entertainment $738,000 N/A Walt Disney entertainment $148.3 million +48% Glenfed savings and loan $35.2 million -27% Lincoln Bancorp banking $1.4 million +78% Lockheed aerospace $104.0 million -22% Martin Lawrence art $1.6 million +75% MCA entertainment $75.7 million +247% Micropolis disk drives ($15.1 million) N/A Newhall Land real estate $10.1 million -38% Superior Industries car wheels $4.3 million +60% 20th Century insurance $14.8 million +377% Valley Federal savings and loan $116,000 N/A Zenith National insurance $9.2 million -20%

* From year earlier quarter

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N/A: Not applicable


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