Profits Climb for Lockheed, PacTel and Philip Morris

Stealth fighter builder Lockheed Corp. reported 21% higher profits Tuesday, citing cost cutting that has sharply reduced employment.

Programs with strong first-quarter results included F-16 fighters, a program the company bought from General Dynamics Corp. last year; C-130 military cargo jets, and the F-22 next-generation stealth fighter.

The Calabasas-based aerospace contractor earned $92 million, or $1.45 a share, during its first quarter, compared to $76 million, or $1.22 a share, during the January-March period in 1993. Sales totaled $3 billion, up from $2.5 billion, boosted by revenue from the F-16 business.

Pacific Telesis Group reported improved first-quarter results, bolstered by rising demand for telecommunications services, a stronger economy and efforts to restrain costs.

The San Francisco-based parent of Pacific Bell and Nevada Bell earned $305 million, or 72 cents a share, on revenue of $2.29 billion. It lost $1.73 billion, or $4.25 a share, on revenue of $2.29 billion the year before.

The results for both quarters were influenced by onetime adjustments. Earnings last year were reduced by the adoption of new accounting standards and the establishment of a reserve fund for restructuring expenses.

Earnings this year include results from cellular, paging and international business units that were spun off April 1 into a new company, AirTouch Communications.

Nonetheless, the results of the underlying business showed some improvement and reflected what the company characterized as longstanding efforts to reduce costs.

Philip Morris Cos. reported a better first-quarter performance than analysts had expected: 59% higher profit than last year, when results were hurt by an accounting rule change. The tobacco and food conglomerate said profit was off 3.5% if the rule change is excluded.

That was largely because Philip Morris was charging more a year ago for premium cigarettes. A price war later erupted, and though the conflict has since cooled, prices for brands such as Marlboro are still below those of a year ago.

For the quarter ended March 31, Philip Morris earned $1.17 billion, or $1.34 a share, compared to $737 million, or 84 cents a share, a year earlier. Analysts had expected earnings of $1.25 a share, the company said. Revenue for the quarter edged up 2% to $15.50 billion, from $15.19 billion a year earlier.

The 1993 results were depressed by $477 million, or 54 cents per share, due to required changes in accounting for retirement benefits.

PaineWebber Group Inc. said its first-quarter profit dropped 22%, partly because of a decline in fixed-income revenue.

The investment company earned $55.6 million, or 71 cents a share, in the quarter ended March 31. A year ago, it earned $70.9 million, or 89 cents a share. Revenue was $752.1 million, up 8% from $696.8 million in the same period last year.