McDonnell Douglas Sets Earnings Record

A rebound of military aircraft sales combined with company cost cutting helped aerospace-defense conglomerate McDonnell Douglas Corp. achieve record third-quarter earnings.

Net earnings for the quarter, released Monday, were $142 million, or $3.62 per share, contrasted with a loss of $42 million, or $1.09 per share, for the same period last year.

The results included a net gain of $41 million, or $1.05 per share, from changes in tax obligations.

Since the beginning of the year, McDonnell has reduced aerospace debt by $793 million, or 29%, to $1.974 billion. The company had about 73,000 employees on Sept. 30, down more than 14,000 from the start of the year.

The military aircraft segment earned $142 million, contrasted with a loss of $166 million in the third quarter last year.

“McDonnell Douglas has become a leaner and fitter competitor,” said John F. McDonnell, chairman and chief executive. “All of our major military programs, including the C-17, were in the black for the first nine months.”

McDonnell reported earnings of $528 million, or $13.46 per share, on revenue of $10.87 billion for the first nine months. That compares to a loss of $7 million, or 19 cents per share, on revenue of $12.76 billion for the first nine months of 1992.

The 1992 report excluded the effect of the adoption of a new accounting rule related to retiree health benefits.

The company’s commercial aircraft segment had earnings of $16 million for the quarter, the 12th consecutive profitable quarter, compared to $37 million last year.

McDonnell Douglas delivered 14 MD-80 twin jets in the third quarter, including four to a customer under a lease arrangement. That compares to 20 twin jet deliveries for the third quarter of 1992.

McDonnell stock surged on the news, closing up $4.375 at $98.125 on the New York Stock Exchange.