Rockwell Profits Decline 36% in Second Quarter
Slammed by a nose dive in aerospace revenue, Rockwell International Corp. on Tuesday reported that its second-quarter profits fell 36% to $99 million.
The diversified technology company’s net income fell to 45 cents per share, down from 66 cents per share, or $155.2 million, a year earlier. Sales of $2.76 billion in the quarter ended March 31 were down 8% from $2.99 billion the previous year.
Chief Executive Donald R. Beall said earnings were hurt by a 51% drop in earnings for the company’s aerospace businesses. In particular, results were down from the fiscal 1991 second quarter because of higher revenue last year due to the B-1B bomber maintenance program and last year’s delivery of the space shuttle Endeavour.
Earnings were also held down by the recession’s effect on the company’s commercial businesses--particularly electronics and printing press manufacturing. Beall said he was encouraged by better earnings in the company’s automotive parts manufacturing businesses.
In a separate announcement, the company said it might shut down an automotive parts plant in Winchester, Ky., that employs 135 people. The plant may be closed in September, depending on negotiations with the United Auto Workers.
Analysts said the lower earnings were expected.
“They are obviously still showing effects from the weak economy,” said Paul Nisbet, an analyst with Prudential Securities Research, an investment banking firm in New York. “It might seem they’re a quarter behind everybody else in the recovery.”
The earnings did not reflect an $18.5-million fine that Rockwell may pay as a result of its guilty plea last month to charges that the company violated federal environmental laws in its management of the Rocky Flats nuclear weapons plant in Colorado.
A federal judge is expected to make a ruling on the proposed settlement in June, said Rockwell spokesman William Mellon. The company has already set aside a reserve that will cover the fine, he said.
Beall reiterated an earlier forecast that 1992 earnings will fall 15% below the $600.5 million recorded in 1991, not including a charge of $1.5 billion in the first quarter. The company took the onetime charge to comply with an accounting standard that requires corporations to recognize retirees’ medical costs.
For the first six months of fiscal 1992, the company had a net loss of $1.3 billion, or $5.79 per share, after adoption of the accounting change.
Excluding the onetime charge resulting from the accounting change, the company had six-month profits of $222.3 million, or 99 cents per share, down 25% from 1991’s six-month net income of $296.7 million, or $1.26 per share.
