A Few Sizable Losses Creep Into Quarterly Results
Although most San Fernando Valley area companies made money in the first three months of the year, several posted big losses.
Of 54 major companies reporting results, 31 posted an increase in profit from a year earlier or a profit compared to year-earlier losses. Nine companies reported earnings declines from a year earlier, and 14 companies posted a loss. The companies surveyed are those with headquarters from Glendale to Camarillo with stock that is publicly traded. Most of their financial quarters ended March 31.
Companies reporting large losses included Amgen, a Thousand Oaks biotechnology firm that lost $8.9 million in the quarter; Tandon Corp., a Moorpark personal computer maker that lost $9.8 million, and Micropolis Corp., a Chatsworth maker of disk-drive data storage equipment that posted a $13.3-million loss.
Amgen’s loss came as a result of unexpected delays in getting its first commercial product, erythropoietin, an anti-anemia drug, to market. The drug’s introduction, delayed by a lawsuit filed by Amgen’s marketing partner, Ortho Pharmaceutical, is expected to be approved shortly by the U.S. Food and Drug Administration.
Micropolis and Tandon are both former high-flying technology companies. Micropolis has been troubled by a glut in the computer disk-drive business and production problems. Tandon’s problems include lower profit margins because of soft prices in the personal-computer business.
Results were unspectacular for another high-tech company, Dataproducts Corp., a computer printer maker that seems to be the target of a takeover by a New York investment group. The Woodland Hills company posted a thin $202,000 profit in the quarter, as its sales slowed. The figure, however, was an improvement over year-earlier results, when it lost $14.9 million, mostly because of a one-time charge to earnings for the relocation of a plant from New Hampshire to Woodland Hills.
One of the biggest quarterly increases in profit was posted by 20th Century Industries, the Woodland Hills holding company for 20th Century Insurance, one of the state’s major automobile and property insurance companies. 20th Century’s profit nearly quadrupled in the first quarter to $29.1 million from $7.6 million a year earlier.
Ironically, the big increase in profit for 20th Century, which came largely from improved earnings on its operations, comes in the wake of the November passage of Proposition 103. The initiative was designed to lower insurance rates and was recently upheld by the California Supreme Court.
Another large insurance firm, Zenith National in Woodland Hills, earned $12.5 million, down about 1% from the year-earlier quarter. The company specializes in workers compensation insurance.
Lockheed Corp., the Calabasas-based aerospace giant, reported that its profit fell 45% to $62 million, mainly because of the completion of the military C-5B Airlifter program and an increase in tax rates.
In the entertainment business, MCA, the Universal City entertainment firm, reported that its profit was virtually flat, rising 2% to $27.3 million. One reason for the modest showing was that in the year-earlier period, the company enjoyed a $10.5-million tax credit, which boosted its profit.
Walt Disney Co.’s profit jumped 24% to $149 million in the quarter, led by attendance at Walt Disney World in Florida, the company’s television business and the licensing of consumer products.
Another entertainment company that posted higher profits is Live Entertainment, a Newbury Park firm that produces films on videocassettes and is 49% owned by Carolco Pictures. Its earnings more than doubled to $1.6 million.
$431,000 Profit
Dick Clark Productions, a Burbank producer, posted a 7% increase in profit to $431,000 as a result of profits from television series work and specials.
Savings and loans posted lower earnings, the result of a jump in interest rates that has squeezed their profits by narrowing the spread between what they pay to attract funds and the interest they receive when they make loans.
Glenfed, the Glendale parent of Glendale Federal Bank, saw its quarterly earnings fall 56% to $20.2 million. Valley Federal Savings, a Van Nuys savings and loan, earned $178,000, down 87% from a year earlier. Valley Federal continues to have problems with All Valley Acceptance, a unit that finances mobile homes and lost $3.8 million in the first quarter.
Profit at Lincoln Bancorp, a fast-growing Encino institution that caters to business, more than doubled in the quarter, to $1.4 million.
Superior Industries, a Van Nuys maker of wheels for major auto companies, reported a 28% jump in its profit to $3.9 million. The company has enjoyed strong demand for its wheels.
Martin Lawrence Limited Editions, a chain of art galleries based in Van Nuys, posted a profit of $1.5 million. Although its earnings rose a healthy 19%, the percentage increase was below the 75% to 100% increases that the company has posted in some of its recent quarters.
QUARTERLY PROFITS
Profit Company Industry (loss) % Change* Amgen biotechnology ($8.9 million) N/A Dataproducts cmpter prnters $202,000 N/A Dick Clark Prods. entertainment $431,000 +7% Walt Disney entertainment $149 million +24% Glenfed savings and loan $20.2 million -56% Lincoln Bancorp banking $1.4 million +128% Live Entertainment entertainment $1.6 million +152% Lockheed aerospace $62 million -45% Martin Lawrence art $1.5 million +19% MCA entertainment $27.3 million +2% Micropolis disk drives ($13.3 million) N/A Superior Industries car wheels $3.9 million +28% 20th Century insurance $29.1 million +283% Valley Federal savings and loan $178,000 -87% Zenith National insurance $12.5 million -1%
* From year earlier quarter
N/A: Not applicable
