Digital’s Third-Quarter Profit Rises 68%
Digital Equipment said its fiscal third-quarter earnings rose 68% as it dropped less profitable lines and benefited from faster sales of high-margin products based on its trademark technology.
The No. 3 U.S. computer maker exited the home personal computer business in January as sales failed to make a dent in a crowded market. At the same time, the Maynard, Mass., firm cut manufacturing costs and boosted sales of corporate machines that use its Alpha computer chip, considered the world’s fastest.
Net income rose to $124.1 million, or 74 cents a share, from $73.7 million, or 44 cents, a year earlier. Wall Street expected the company to earn 73 cents a share.
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Netscape Communications, maker of the leading software for finding information on the Internet and similarly styled data networks, earned $4.7 million for the first quarter, exceeding Wall Street forecasts. The profit amounted to 6 cents per share; revenue was $55 million, the company said Tuesday.
Mountain View, Calif.-based Netscape was not a public firm a year ago. However, the company said it lost $3.9 million, or 6 cents per share, on revenue of $5.4 million at that time.
A more relevant comparison of Netscape’s growth may be drawn from its performance in the last three months of 1995, when it earned $2.4 million, or 3 cents a share, on revenue of $40.6 million.
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UAL and Southwest Airlines reported dramatic increases in first-quarter profits because of higher ticket prices and more passengers.
UAL, the Township, Ill.-based parent company of United Airlines, saw its profit from operations rise to $105 million, or $3.07 a share on a fully distributed basis, from $59 million, or $1.50, a year ago.
Dallas-based Southwest’s net income rose to $33 million, or 22 cents a share, from $11.8 million, or 8 cents, a year ago.
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Salomon said its first-quarter earnings more than tripled, led by gains from trading bonds and commodities, advising companies and underwriting their securities. The parent of Salomon Bros., the second-largest U.S. securities firm, and Phibro, a commodities trader, said net income rose to $276 million, or $2.44 a share, from $81 million, or 59 cents, a year ago. Salomon’s profit, the third-largest ever for the firm, was more than twice as high as the average analyst estimate of $1.06 a share, according to IBES International.
At a Glance:
Three large U.S. insurance companies said their first-quarter earnings were hurt by either winter-storm claims or bad consumer loans. Chubb said profit excluding gains from investment sales fell to $137.1 million, or $1.55 a share, from $144.5 million, or $1.64, a year earlier. The results exceeded expectations of $1.54 a share. TIG Holdings said its earnings, excluding gains or losses from investment sales and a restructuring charge, rose to $34.4 million, or 55 cents a share, from $26 million, or 41 cents, a year earlier. The results fell below expectations of 56 cents a share. American General said profit excluding gains and losses from investment sales fell to $152 million, or 73 cents a share, from $174 million, or 85 cents, a year earlier. The results fell below expectations of 74 cents a share. USLife said first-quarter net income rose 7% to $26.2 million, or 75 cents a share, compared with $24.3 million, or 70 cents a share, for the first quarter of 1995.
RJR Nabisco Holdings said its first-quarter profit rose 5.6%, more than analysts expected, as cigarette sales surged 12%. It had profit from operations of $209 million, or 59 cents a share, exceeding the 55-cent average estimate. A year earlier, it earned $198 million, or 51 cents.
ITT said profit tripled in its first full quarter independent from the old ITT, helped by strong performances from its hotel and casino units. The New York-based entertainment and hotel company said net income rose to $20 million, or 17 cents a share, from pro forma net income of $6 million, or 5 cents, in the year-earlier period, beating expectations of 15 cents a share.
Nynex said first-quarter earnings rose a better-than-expected 19%, to $361.5 million, or 83 cents a share, from $304 million, or 72 cents, a year ago. Results beat a mean earnings estimate of 81 cents a share.
Bristol-Myers Squibb’s first-quarter earnings rose a stronger-than-expected 11% to $726 million, or $1.44 a share, from $657 million, or $1.29, a year earlier. . . . United Technologies said first-quarter earnings rose 22% to $164 million, or $1.24 a share, from $135 million, or $1.03, in the year-earlier quarter. . . . Ralston Purina said fiscal second-quarter pro forma earnings fell 7.5%, far below expectations, to $59.1 million, or 55 cents a share, from pro forma profit from operations of $63.9 million, or 59 cents, in the year-earlier quarter. . . . Avery Dennison said its first-quarter net income rose a better-than-expected 17% to $40 million, or 76 cents a share, from $34.5 million, or 65 cents, in the year-ago period.
Monsanto said first-quarter earnings rose 17% to $268 million, or $2.24 a share, from $229 million, or $2.02, a year earlier. . . . SunAmerica said its record second-quarter earnings were up 41% to $68.2 million, or 96 cents a share, from $47.4 million, or 68 cents a share, for the comparable 1995 quarter. . . . Burlington Northern Santa Fe said its first-quarter earnings rose 31% to $187 million, or $1.21 a share, from $143 million, or 94 cents, for the year-ago quarter. . . . Oakley shares rose to a record high after the company posted a first-quarter earnings increase of 32% to $10.9 million, or 31 cents a share, from $8.3 million, or 26 cents, a year ago. . . . Western Atlas said its first-quarter earnings rose 18.2% to $22.7 million, or 42 cents per share, compared with $19.2 million, or 36 cents per share, for the same quarter a year ago.
