Rockwell Reports Drop in Net Earnings for Year

Rockwell International Corp. said net earnings fell 11% during the fiscal year, reflecting costs in launching its high-speed personal computer modem and charges related to research and the spinoff of its automotive business.

Earnings for the year ended Sept. 30 dropped to $644 million, or $3.01 per share, from $726 million, or $3.34 per share, in 1996, the company said. Fourth-quarter earnings, however, were up to $109 million, or 53 cents per share, compared with $97 million, or 45 cents per share, during the fourth quarter of 1996.

Rockwell is in intense competition with 3Com/U.S. Robotics in the production of fast modems for PCs. Both companies hope their systems will be adopted as the industry standard. Earnings in the company’s semiconductor systems unit also were hurt by lower prices for its older modems and chips.

Semiconductor sales fell to $1.58 billion from $1.59 billion in 1996. Operating profits dropped to $231 million, down from $330 million.

“Semiconductor systems will be facing continued uncertainty in 1998,” said Don Davis, Rockwell’s president and chief executive.

“We expect stronger performance in the second half of fiscal year 1998,” he said, adding that the company also expects “to return to our long-term growth targets in 1999.”

The slowdown in semiconductor sales was offset somewhat by an 8% sales increase in the automation unit, Rockwell’s largest business. Sales rose to $4.5 billion, including a record $491 million in orders during September.

Sales in the Avionics & Communications division rose 15% to $1.7 billion from $1.5 billion in 1996.

Rockwell stock fell 75 cents a share to $49 on the New York Stock Exchange.