Rockwell International Corp. said Friday that it will lose about $1 billion for its current year because of the continuing effects of the recession and a one-time charge against earnings due to an accounting change.
The diversified manufacturer, with interests in aerospace, electronics, automotive and graphics businesses, said it would take a one-time charge of $1.5 billion for its second fiscal quarter for expenses related to future medical and benefit costs.
The charge was expected since November, when the Seal Beach-based company acknowledged in its annual report that it would adopt a new accounting standard.
As a result, Rockwell said it will restate its financial results for the first quarter ended Dec. 31 to report a loss, and will also report a deficit of perhaps $1 billion for its fiscal year that ends Sept. 30.
The company's per-share earnings will decline 15% from 1991's $2.57 per share before the effect of the special charge, Chairman Donald R. Beall said.
He said operating earnings should rebound in 1993, when results from the automotive and factory automation segments are expected to improve.
"This change in accounting will neither affect the company's dividend policy nor its cash flow," Beall said.
The new accounting standard is required of all corporations by the Financial Accounting Standards Board, the independent board that sets accounting rules for the industry.
The company's first-quarter results will be restated to reflect the charge, though technically it will be recorded in the second quarter ending March 31.
In January, Beall said that without an economic recovery, it would be difficult to meet last year's results.
Rockwell stock closed Friday at $26, down 75 cents a share, in New York Stock Exchange trading.
George Podrasky, an analyst at Securities Corp. of Iowa, a brokerage in Cedar Rapids, said he had expected earnings would be somewhat higher than Beall's latest projection.
"They said it would be difficult to meet last year's numbers," he said. "It appears their automotive and graphics businesses are still hurting."
Podrasky said he thinks the automotive parts business could recover in the second half of the year, but he remained pessimistic about the graphics business, which makes and sells printing presses.
"You'll see a staggered recovery" for the overall company, he said. Rockwell moved its corporate headquarters from El Segundo to Seal Beach in December.