$55-Million 2nd-Quarter Loss at MGM

Metro-Goldwyn-Mayer Inc. on Friday reported a second-quarter loss and said it will raise $250 million in equity capital, partly because it expects to generate cash more slowly than expected from TV and home video operations.

The Santa Monica-based company said it lost $55 million, or 84 cents a diluted share, reflecting a write-down related to the release of certain feature films, litigation and other expenses. The company lost $14.8 million, or 88 cents a share, for the year-earlier period, but said those results are not comparable because of the acquisition of Orion Pictures Corp. and certain of its subsidiaries in July 1997. Revenue was $279 million for the latest period.

MGM said it is looking into alternative financing, such as a rights offering. The company said its major shareholders, Tracinda Corp. and Seven Network Ltd., support the equity financing. Tracinda and Seven Network own 65% and 25%, respectively, of MGM’s outstanding shares.

MGM, which has not had a profitable year 1988, has been trying to expand its film slate and its TV production operations to generate more revenue.

Larger-than-expected investments in its TV business for new episodes of shows such as “Stargate SG-1” and “The Outer Limits” and other problems have left the company in need of capital.

MGM also said it’s pursuing the equity financing because some of its recent films haven’t done well at the box office, and that has “affected the timing of cash receipts.” Moreover, the company expects to generate cash more slowly than expected from its TV syndication and home video operations.

At a Glance

Other earnings, excluding one-time gains and charges, unless noted:

* AMP Inc., maker of electronic connectors and electrical products, said second-quarter earnings plunged 49%, to $54.8 million, or 25 cents a diluted share. The company had issued a profit warning, but the results were well below the 35 cents Wall Street expected. Sales dropped 7.9%, to $1.35 billion, on weakness in Asia and a slowdown in orders from U.S. computer companies. AMP also said it plans to take as much as $250 million in charges this year to cut costs, boost sales and become more competitive. Last week, AMP said it would cut 3,500 jobs, or 7.5% of its work force.

* American Pacific State Bank said its second-quarter profit rose 10%, to $650,000, or 12 cents a share, from $590,000, or 11 cents, a year ago. The Sherman Oaks-based bank said net interest income rose and that assets rose 21% to a record $389 million. An unprecedented rate of prepayments on mortgage-backed securities hurt its results, however, and could also cut into third and fourth quarter earnings, it said.

* Baker Hughes Inc. said its fiscal third-quarter profit rose 15%, to $81.8 million, or 46 cents a diluted share, matching estimates, as revenue jumped 21%, to $1.1 billion. The oil field services and equipment company said the results were achieved despite lower oil prices that reduced the number of rigs in use worldwide by 8%.

* Eastman Chemical Co., maker of polyester plastics for packaging, said second-quarter earnings rose 7.7%, to $97 million, or $1.21 a diluted share, beating analysts’ average estimate of $1.14, as sales fell 3.6%, to $1.17 billion. But costs were lower, and prices for its polyethylene terephthalate used in some packaging were up significantly from a year earlier, it said.

* FirstFed Financial Corp., parent company of First Federal Bank of California, said its profit jumped 62% for the second quarter, to $8.6 million, or 40 cents a diluted share. Net interest income for the Santa Monica-based company rose 13%.

* Hershey Foods Corp., the largest U.S. candy company, said second-quarter earnings dropped 5.1%, to $47.9 million, or 33 cents a share, on a 2.8% decline in revenue, to $880.4 million. The company cited disappointing results from promotions tied to the movie “Godzilla” and weak sales in Asia, where it gets less than 3% of its annual sales. Hershey warned two weeks ago that its profit would be 5 to 7 cents less than the 38 cents a share expected by analysts.

* Gold producer Homestake Mining Co. said its second-quarter loss from operations narrowed to $13.3 million, or 6 cents a diluted share, from $14.9 million, or 7 cents, a year ago, as it increased production and lowered spending. The results were in line with forecasts. Revenue slipped 1.7%, to $210.7 million, as the company dealt with a 12% decline in gold prices during the year.

* Knight Ridder Inc. said its profit increased 9.8% in the second quarter, to $66.9 million, or 68 cents a share, as revenue grew 9.5%, to $779.3 million. The newspaper publisher said strong advertising growth, particularly in Detroit and Philadelphia, helped offset higher newsprint costs.

* Steelmaker LTV Corp. said second-quarter earnings tumbled 85%, to $4 million, or 3 cents a share, meeting estimates, as sales rose 0.1%, to $1.09 billion. LTV cited lower steel prices, reduced shipments to strike-hobbled General Motors and the idling of a blast furnace for maintenance that is conducted every 10 years.

* MGM Grand Inc. said its net income plunged 56% in the second quarter, to $14.4 million, or 25 cents a diluted share, citing bad luck at its casino tables and difficulties in repeating last year’s success at its 50%-owned New York New York Hotel/Casino. Revenue fell 11% to $185.4 million. The casino company controlled by billionaire Kirk Kerkorian warned last month that weaker table winnings would pull earnings down to as little as 25 cents a share. Analysts then adjusted their estimates from 45 cents to 27 cents. MGM said the latest results also suffer in comparison with the 1997 quarter, which included a heavyweight title fight between Evander Holyfield and Mike Tyson.

* The New York Stock Exchange said second-quarter profit grew 9.3%, to $30.5 million, on an 11% increase in revenue, to $178.9 million, as trading volume increased.

* SGV Bancorp Inc., the holding company for First Federal Savings & Loan Assn. of San Gabriel Valley, earned $431,000, or 17 cents a diluted share, for the fiscal fourth quarter, down 17% from year-ago results that included a gain of $344,000 from a litigation settlement. Net interest income rose 11.5%, to $2.9 million, at the West Covina-based company.