THE TIMES 100 : THE BEST PERFORMING COMPANIES IN CALIFORNIA : THE REGIONS : Slimmer L.A. Corporations Post Big Gains
Consider the overweight marathoner who has just performed poorly in a race. Faced with an even more arduous course in the future, a determined athlete would slim down to prepare.
That’s just what many of Los Angeles County’s largest companies began doing in 1990 when faced with the onset of recession.
Thus, although the recession deepened in 1991--making the run even more difficult--more county firms were better prepared for the financial race.
The results were remarkable. Despite the gloomy 1991 economic climate, many Los Angeles County companies made a financial comeback last year.
Segments of the retailing and banking industries struggled, but the county’s manufacturers, insurance firms and producers of electronic, environmental and medical equipment led an earnings resurgence in the teeth of the worst local recession in decades.
After watching their profits plunge in 1989, even the troubled aerospace industry continued to recover.
Defense contractors Lockheed and Northrop rebounded in 1991 in part by restructuring and reducing their work force in the face of Pentagon cutbacks.
Consider the numbers. Of the Los Angeles County companies that appeared on the various lists generated for The Times by MZ Group for this 1992 report, 126 recorded profits and 54 reported losses. In contrast, a year earlier 98 county firms were profitable and 90 were money-losers.
Want more evidence of the local resurgence? Consider the list of California companies with the best earnings improvement. Of the 72 companies ranked, 24 are based in Los Angeles County. And of the top 25, 10 make their home in L.A. County.
Yes, there were some losers. Of the 10 companies with the greatest profit-to-loss plunge from 1990 to 1991, four are located in Los Angeles County.
But the number of county winners has grown. For example, Los Angeles County had the most companies--33--on The Times 100 ranking of firms by two-year average return on equity. There were 28 L.A. County firms on that list last year.
While there have been improvements in the bottom line, the county’s unemployment line has also been growing. The county accounted for 208,000 of the 333,000 jobs lost in the state in 1991. Unfortunately, there was a correlation between the unemployment and the county’s apparent earnings uptick, said Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., a private, nonprofit organization.
“We had big job losses because companies have been downsizing,” Kyser explained. “Corporate executives have been aggressive in battening down hatches and containing costs. The situation has been troubling in terms of job creation and job growth, but encouraging in terms of earnings. Once an economic recovery begins, we can expect (county) companies to do even better, and hopefully there will be a hiring surge some time in the future.”
If there is to be a big increase in hiring, many of the L.A. County companies on The Times 100 list will have to lead the way. The county’s economic strength has been its diversity, and the varied nature of the area’s corporate base is reflected in the list of county firms on The Times 100, the ranking of firms based on two-year average equity return.
From the toy industry is Mattel, the El Segundo-based firm that has mastered the world of international trade. Mattel’s suppliers and markets span the globe. Mattel ranked seventh on The Times 100.
From the field of high technology is International Rectifier Corp., a semiconductor manufacturer that is also based in El Segundo and ranked ninth.
Many of the county’s property and casualty insurers had a very good year.
Among those making The Times 100 cut were Los Angeles-based Mercury General Corp. and Argonaut Group and Woodland Hills’ 20th Century Industries.
As for some other Times 100
notables, entertainment was profitable for Burbank-based Walt Disney Co.
Neutrogena Corp., the Los Angeles maker of soaps and cosmetics, cleaned up in its industry. And Pasadena-based Jacobs Engineering showed it can also build equity earnings.
Finally, back on The Times 100 list--following an absence last year--was Lockheed, the Calabasas aerospace giant.
Lockheed, which had earnings of $6 million in 1989, had very impressive profits in 1990 and a strong showing in 1991. With earnings of $308 million in 1991, Lockheed ranked fifth among the county leaders in absolute profit. And another county aerospace leader--Northrop Corp.--was ranked ninth, with income of about $200 million.
SCE Corp., the Rosemead utility, topped the county list of profit leaders. Like SCE Corp., Times Mirror Co. continued to be a fixture in the county-based profit-leader category.
However, the strongest industry performance in that category came from the oil and gas industry as three Los Angeles firms--Atlantic Richfield Co., Occidental Petroleum and Unocal Exploration Corp.--ranked among the county’s most profitable. Occidental’s 1991 run was particularly impressive because it did not even make the previous county list of most profitable firms, which was based on 1990 income.
While oil and gas showed strength, segments of the banking industry soured.
Those changes were also reflected in the county as Los Angeles-based Security Pacific and First Interstate led the “Nose Dive” list--firms with the greatest profit-to-loss plunge--as No. 1 and No. 2 respectively.
Also, on that list was one of the more anomalous performers of the year--Los Angeles-based Carolco Pictures. Heavy losses late last year created Carolco’s financial reversal.
However, the company was also ranked first among the county’s revenue-growth leaders.
As for the county’s “Born Again” firms with the best earnings improvements, Countrywide Credit Industries, the Pasadena-based mortgage banker, led a varied group.
Among the 10 county firms on the list of the top 25 earnings boosters are two retailers, a semiconductor manufacturer, a hotel operator, an auto parts maker, an engineering firm, a cosmetics producer, an engineering firm, a savings and loan and a provider of environmental services.
Indeed, the firms in that Born Again category reflect the diversity and strength of Los Angeles County commerce. After all, those companies showed they can dramatically improve their performance in a financial race.
Los Angeles County Profit Leaders
Companies ranked by profit from continuing operations.
1991 Change Income in Income Rank Company ($ millions) ($ millions) 1 SCE Corp. 744.8 (85.6) 2 Atlantic Richfield Co. 709.0 (979.0) 3 Walt Disney Co. * 673.7 (146.3) 4 Occidental Petroleum Corp. 379.0 2,067.0 5 Lockheed Corp. 308.0 (27.0) 6 Great Western Financial 298.1 105.1 7 National Medical Enterprises * 292.3 32.8 8 H. F. Ahmanson & Co. 245.8 54.8 9 Northrop Corp. 200.8 (9.6) 10 Unocal Exploration Corp. * 150.0 (12.6) 11 Mattel Inc. 118.1 26.9 12 20th Century Industries 103.5 4.8 13 Argonaut Group Inc. 84.4 (5.3) 14 Hilton Hotels Corp. 84.3 (28.2) 15 Times Mirror Co. 82.0 (98.5)
* See exceptions, Page 54.
Source: MZ Group.
Los Angeles County Revenue Growth Leaders
Companies ranked by one-year average annual sales growth rate.
1-Year Avg. Annual 1991 Sales Revenue Rank Company Growth % ($ millions) 1 Carolco Pictures Inc. 95.0 524.9 2 Pathe Communication Corp. 75.3 921.7 3 Century Medicorp * 62.9 137.5 4 Republic Pictures 42.4 81.7 5 Countrywide Credit Industries* 40.9 278.5 6 House of Fabrics Inc. * 37.0 455.1 7 Merisel Inc. 33.0 1,585.4 8 Farr Co. 32.4 112.4 9 Image Entertainment * 31.7 56.8 10 Syncor International Corp. * 28.3 181.3 11 Teradata Corp. * 24.9 297.0 12 Tekelec 24.4 52.4 13 IDB Communications Group 20.8 104.4 14 Internat’l Technology Corp. * 19.1 460.4 15 Diagnostic Products Corp. 18.7 90.1
1991 Profit/(Loss) Rank ($ millions) 1 (39.648) 2 (352.935) 3 4.875 4 .648 5 44.982 6 17.801 7 10.826 8 (2.996) 9 .048 10 5.787 11 9.116 12 4.581 13 2.835 14 21.903 15 19.320
* See exceptions, Page 54.
Source: MZ Group. Certain historical data is from Standard & Poor’s Compustat Inc.
Los Angeles County Revenue Leaders
Companies ranked by overall revenue.
1991 Revenue % Change Rank Company ($ Millions) From 1990 1 Atlantic Richfield Co. 17,037.0 -9 2 Occidental Petroleum Corp. 10,096.0 -53 3 Unocal Corp. 9,845.0 -8 4 Lockheed Corp. 9,809.0 -1 5 Security Pacific Corp. 8,921.6 -14 6 SCE Corp. 7,502.5 4 7 Walt Disney Co. * 6,626.6 10 8 Pacific Enterprises 6,599.0 -5 9 Northrop Corp. 5,694.2 4 10 Litton Industries Inc. * 5,350.8 3 11 Vons Cos. 5,350.2 0 12 First Interstate Bancorp 5,119.7 -15 13 H. F. Ahmanson & Co. 4,592.1 -4 14 National Medical Enterprises 3,972.7 6 15 Great Western Financial 3,952.7 -6
* See exceptions, Page 54.
Source: MZ Group. Certain historical data is from Standard & Poor’s Compustat Inc.
Los Angeles County Market Value Leaders
Companies ranked by stock market valuation.
4/10/92 Market Value Book Value Market as Rank Company ($ millions) ($ millions) % of Book 1 Walt Disney Co. * 19,949.3 4,098.1 487 2 Atlantic Richfield Co. 16,708.5 6,832.0 245 3 SCE Corp. 9,155.5 6,238.4 147 4 Occidental Petroleum Corp. 5,644.0 4,340.0 130 5 Unocal Corp. 5,132.0 2,464.0 208 6 Times Mirror Co. 4,466.1 1,884.0 237 7 Lockheed Corp. 2,832.2 2,503.0 113 8 Mattel Inc. 2,303.1 438.3 526 9 National Medical Enterprises 2,287.6 1,784.7 128 10 Hilton Hotels Corp. 2,268.1 952.8 238 11 First Interstate Bancorp 2,252.2 2,639.5 85 12 Great Western Financial 2,223.1 2,321.1 96 13 H. F. Ahmanson & Co. 1,908.9 2,656.4 72 14 Litton Industries Inc. * 1,849.9 1,212.7 153 15 Avery Dennison Corp. 1,584.9 825.0 192
* See exceptions, Page 54.
Source: MZ Group
Los Angeles County Stock Leaders
Companies ranked by percent gain in stock price.
% Change 4/10/92 4/12/91 Stock Stock Stock Rank Company Price Price Price 1 Merisel Inc. 350.0 12.38 2.75 2 Superior Industries Internat’l 139.8 46.88 19.54 3 Century Medicorp 139.7 20.00 8.34 4 DEP Corp. 128.6 14.00 6.13 5 IDB Communications Group 116.2 17.50 8.10 6 Viking Office Products Inc. 111.9 17.75 8.38 7 Caesars World 79.4 38.13 21.25 8 Foothill Group Inc. 77.8 8.00 4.50 9 Mattel Inc. 76.6 36.38 20.60 10 Electro Rent Corp. 71.8 17.75 10.33 11 Jacobs Engineering Group Inc. 60.4 29.88 18.63 12 Broad Inc. 41.5 16.63 11.75 13 Virco Manufacturing 34.9 8.13 6.02 14 Anthony Industries Inc. 34.2 11.50 8.57 15 Kit Manufacturing 32.6 7.63 5.75
Source: MZ Group.
