Harnischfeger’s 3rd-Quarter Loss Larger Than Expected

Paper and mining equipment manufacturer Harnischfeger Industries Inc. reported an unexpectedly large loss for the latest quarter and said it will slash its work force by an additional 16%.

In an effort to bring expenses in line with lower sales levels, the company said it will eliminate 2,350 jobs in addition to the 750 it started cutting from its Beloit Corp. paper equipment division in November.

Beloit has been hurt as customers cut production in the wake of high pulp inventories and low prices. Harnischfeger said earlier this year that it would consider the sale or spinoff of Beloit to focus on its mining equipment unit, but profit in that business is shrinking.

Harnischfeger said it lost $38.6 million, or 83 cents per diluted share, for its third quarter, contrasted with a profit of $35.9 million, or 74 cents, a year earlier. Analysts surveyed by First Call had expected a loss of 16 cents a share.

“Harnischfeger’s results for the third quarter reflect the ongoing weakness affecting all of our businesses,” said Jeffrey T. Grade, chairman and chief executive.

Revenue plunged 28.5% to $503.2 million, with sales to financially troubled Asia down sharply.

The pulp and paper division had an operating loss of $65.4 million, contrasted with an operating profit of $28 million a year ago, as sales plummeted 56%. The mining group’s sales edged up 2.9% but operating profit dropped 63.5%.

Grade said he expects the depressed conditions to continue into 1999.

Wall Street sent Harnischfeger’s shares tumbling down $3.38, or 16.7%, to close at $16.88 on the New York Stock Exchange.