Rockwell Reports 50% Decline in First-Quarter Profit

Rockwell International Corp. on Tuesday said first-quarter profits fell 50%, largely due to acquisition costs and weakness in its chip business.

The lower results from semiconductors were partly offset by strong sales of automation and avionics equipment.

Rockwell said it earned $89 million, or 43 cents a share, for the three months ended Dec. 31, down from $179 million, or 81 cents per share, in the year-ago period.

Revenue rose 7% to $1.98 billion from $1.85 billion.

Rockwell said it would have posted profits of $152 million, except for a one-time charge related to its acquisition of Hughes-Avicom International Inc., a maker of in-flight entertainment systems. The company had operating earnings of $154 million a year ago.

The company said profits from its semiconductor operations fell 47% because of lower prices for its modem chips, delays in selling its new K56 flex modem and big investments in new product lines. Rockwell is competing with 3Com/U.S. Robotics, another maker of fast modems for personal computers.

The drop was partly offset by profit gains of 10% in automation and 25% in avionics and communications.

Sales for the quarter rose about 7% to $2 billion from $1.9 billion.

Rockwell’s stock rose 88 cents a share to close at $52.88 on the New York Stock Exchange.