Rockwell Profit Declines Because of Special Costs

Rockwell International Corp., saddled with $104 million in costs associated with the reorganization of its overseas automotive business and the acquisition of San Diego integrated circuit maker Brooktree Corp., posted lower profit for the fiscal year.

The company said Wednesday that it earned $726 million, or $3.34 per share, down 2.1% from $742 million, or $3.42 a share, for the previous year. The decline was the first for the Seal Beach-based industrial and electronics giant since it posted a $1-billion, reorganization-related loss in 1992.

Rockwell’s 1996 profits include income from the company’s defense and aerospace units, which are scheduled to be sold in December to Boeing Co. The Seattle aircraft maker is paying about $3.2 billion for the business, which will become a new subsidiary called Boeing North American and will be headquartered in Seal Beach.

Rockwell said that revenue for the year ended Sept. 30 rose almost 8.5% to $14.1 billion from $13 billion. The company’s defense and aerospace businesses accounted for about $3 billion of revenue in 1996 while its graphics business, which has since been sold, generated an additional $600 million. Together, the discontinued business units accounted for $171 million, or 23.6%, of Rockwell’s fiscal 1996 profit.

For the fourth quarter, profit dropped 48.7% to $97 million, or 45 cents per share, from $189 million, 88 cents a share, because of the previously reported acquisition and restructuring write-offs. Revenue of $3.5 billion was unchanged. The aerospace and defense businesses accounted for $800 million in revenue and $26 million of profit in the fiscal 1996 fourth quarter.

Rockwell’s industrial automation and semiconductor businesses, both part of its electronics unit, led the company’s sales growth. The Newport Beach-based semiconductor unit’s revenue jumped almost 83% to $1.6 billion from $875 million in fiscal 1995, while the Wisconsin-based automation business posted a 15.8% hike in sales to $4.16 billion from $3.59 billion.

Separately on Wednesday, Rockwell’s Collins Avionics & Communications division in Iowa said it has formed a joint venture with two Chinese companies to manufacture and market global positioning satellite navigation products in China.

Rockwell, which helped develop GPS for the military two decades ago, has been a leader for the past several years in developing commercial uses for the technology.

The joint venture with two state-owned Chinese companies, Shanghai Avionics Corp. and Shanghai Broadcast Equipment Factory, will build hand-held and vehicle-mounted GPS navigation receiver systems for commercial use in China’s transportation industries. GPS systems make use of a series of 24 orbiting satellites to locate vehicles with pinpoint accuracy anywhere on earth. They can be used to keep track of trains, buses, trucks, ships and airplanes.

Rockwell declined to disclose financial details but said the deal won’t create many job opportunities in the United States. Rockwell will own a 60% stake in the joint venture.