Delta, USAir and Northwest Suffer Losses

Three major airlines said Thursday that they were driven into the red during the late summer by big fare cuts used in a frantic attempt to attract passengers.

* Delta Air Lines Inc., the No. 3 U.S. carrier, reported a $106.7-million loss for its first fiscal quarter, which ended Sept. 30.

Delta said its results were “very disappointing, but not unexpected” after a summer of aggressive ticket discounting.

Atlanta-based Delta’s results were equivalent to a loss of $2.64 a share, contrasted with a profit of $13.1 million, or 17 cents a share, a year ago. Revenue of $3.06 billion was up from $2.57 billion.

Delta said low fares attracted substantial traffic, but the volumes were not great enough to compensate for income lost to discounts. Delta said this week it would lay off 200 pilots, its first layoffs of permanent workers since 1957.

* USAir Group Inc., the nation’s seventh-largest carrier, said it lost $55.4 million, a 32% improvement from the quarter a year ago, when its losses reached $81.4 million.

Arlington, Va.-based USAir said the loss was equal to $1.45 a share, against an $81.4-million, or $2.06 per share, loss a year ago. Revenue climbed to $1.7 billion from $1.6 billion.

“While our third-quarter results are unsatisfactory, there are signs that fares are returning to more compensatory levels,” Chairman Seth Schofield said.

He said USAir’s operating costs declined during the quarter, mainly because of the success of cost reduction programs.

* Northwest Airlines’ parent company lost $19.7 million in the quarter, contrasted with a profit of $22.6 million in the same period a year ago. Revenue rose 3.4% to $2.22 billion from $2.15 billion a year ago. Northwest, based in Eagan, Minn., is privately held so it does not report per-share figures.

The company blamed the loss on half-price fares this summer.

* Salomon Inc. said weak trading results knocked its third-quarter profit down 93%, breaking an industry trend of fat brokerage earnings.

Its income plunged to $6 million from $85 million a year ago, largely because of weak results from trading on its own account.

Results were even more disastrous considering that last year’s profit was pushed down by a $131-million after-tax charge stemming from a bond auction scandal..

The firm said its loss amounted to 9 cents per share after preferred dividend payments, contrasted with a profit of 60 cents a year ago.

Earnings at its Salomon Bros. brokerage unit--where the trading slump occurred--tumbled to $51 million before taxes from $194 million last year.

Revenue from principal transactions--which include trading for its own account--dropped to $215 million from $609 million a year ago.

* Occidental Petroleum Corp. said third-quarter profit fell 64% from 1991 results that were inflated by asset sales and an accounting procedure.

The Los Angeles company posted income of $61 million, or 20 cents a share, compared to $171 million, and 56 cents a share, in the third quarter of 1991.

Last year’s results reflected a one-time gain of $646 million from the sale of North Sea oil and gas fields in 1991.

Earnings from continuing operations fell from $146 million in the third quarter of 1991 to $69 million in 1992, but revenue remained unchanged at $2.3 billion.

“Oil and gas operating earnings reflect recent higher prices,” said Ray R. Irani, Oxy chairman and CEO. “However, chemical (division) earnings continue to be adversely affected by worldwide economic conditions.”

* Sun Microsystems Inc., a vendor of high-powered computer workstations, said first-quarter earnings plunged 82% to $4.8 million, or 5 cents a share, from $26.8 million, or 27 cents per share, a year ago.

The profit drop came even as the Sunnyvale, Calif.-based company posted record quarterly revenue of $855.9 million, up 13.4% from last year’s $754.9 million.

Sun attributed the poor earnings performance to higher costs associated with a major product transition. Sun is also facing fierce competition from Hewlett-Packard, IBM and others, though price battles in the workstation market remain mild compared to the all-out war underway in the personal computer business.

Analysts had expected Sun to earn about 20 cents per share in the current quarter.