Profit Plunges 70% at FirstPlus Financial

Home equity lender FirstPlus Financial Group Inc. said Tuesday that third-quarter earnings plunged 70%. The company also told investors and analysts in a conference call that it faces hurdles before it can close an agreement to sell off key portions of its business to Coast-to-Coast Financial Corp.--a sale that’s essential to its survival.

“If the Coast-to-Coast deal, which is dependent on financing, isn’t completed, they’re going to be out of business,” said Michael Abrahams at Sutro & Co.

Dallas-based FirstPlus said earnings from continuing operations fell to $13.7 million, or 35 cents a share, largely because its sales of securitized loans fell as investors turned away from riskier asset-backed securities.

Revenue edged up to $208.4 million from $208.1 million. The latest results exclude one-time charges of $85.2 million and $10.5 million in losses from curtailed operations.

FirstPlus, which specializes in lending up to 125% of a home’s value minus the balance of a first mortgage, put itself up for sale Aug. 31. After failing to find a buyer, it sold off pieces of its business and fired 3,000 employees, or 50% of its staff, earlier this month, although it said it will continue to make high loan-to-value loans directly to borrowers.

At a Glance

* Equitable Cos. said third-quarter earnings fell 23%, led by declines at its Donaldson, Lufkin & Jenrette Inc. investment bank unit. Equitable, the seventh-largest U.S. life insurer, reported earnings of $141 million, or 63 cents a share, in line with forecasts. Revenue declined 6% to $2.37 billion. DLJ’s profit plunged 79% to $25.8 million on lower securities trading revenue and a decline in underwriting activity that offset higher income from commissions and fees. Profit at Equitable’s insurance and annuities operations rose 15% and total premiums grew 21%.

* St. Paul Cos. said third-quarter earnings fell 74% to $47.7 million, or 19 cents a share, 3 cents lower than analysts expected, as a spate of storms, including Hurricane Georges, raised policyholder claims. The property and casualty insurer’s revenue declined 4.9% to $2.21 billion, as prices of business insurance fell.

* AmeriSource Health Corp.’s fiscal fourth-quarter profit rose 21% to $19.6 million, or 81 cents a share, matching expectations, as the drug wholesaler held down costs. The results exclude charges of $26.7 million taken for costs of its aborted acquisition by McKesson Corp. and some restructuring actions. Revenue fell 8.3% to $2.03 billion.

* Donna Karan International Inc. said third-quarter profit rose more than eightfold to $7.6 million, or 35 cents a share, from $923,000, or 4 cents, missing expectations of 40 cents. Revenue dropped 21% to $170.6 million. The fashion designer also warned that it will only break even this year, far below forecast earnings of 30 cents a share, because of the Asian crisis and excess inventories. Revenue fell 20% to $170.6 million. The year-ago quarter included revenue for the company’s beauty business, which was sold in the fourth quarter of 1997.

* MediaOne Group Inc. said its consolidated loss from continuing operations narrowed in the third quarter to $184 million, or 32 cents a share, from a loss of $226 million, or 40 cents, a year ago. Analysts were expecting a loss of 35 cents. Cash flow rose 32% to $500 million as sales of its basic cable television had double-digit growth.

* Young & Rubicam Inc. said third-quarter net income more than doubled to $24.3 million, or 29 cents a diluted share, from $7.6 million, or 13 cents, a year ago. The advertising agency said revenue grew 12.6% to $375.4 million. The results beat estimates by 2 cents a share.

MORE EARNINGS: C2

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Earnings Watch

A sampling of companies reporting quarterly earnings Tuesday, ranked by year-over-year growth, compiled by First Call:

Reporting Tuesday

*--*

Pct. above/ 1997 Ticker Consensus Actual below 3rd-qtr. Company symbol EPS EPS estimate EPS Aon AOC $0.77 $0.71 -8% $0.56 MediaOne Group UMG -0.35 -0.32 -9 -0.26 MBIA MBI 1.16 1.25 +8 1.02 Ralston-Purina RAL 0.28 0.31 +11 0.26 Emerson Electric EMR 0.72 0.71 -1 0.65 Walt Disney DIS 0.15 0.16 +7 0.19 Texas Utilities TXU 1.02 1.04 +2 1.69 St. Paul SPC 0.16 0.19 +19 0.72

Year- over-year Company % growth Aon +27% MediaOne Group +23 MBIA +23 Ralston-Purina +19 Emerson Electric +9 Walt Disney -16 Texas Utilities -38 St. Paul -74

*--*

Note: Year-over-year growth and percentage changes are based on earnings-per-share figures and may differ from percentage changes based on total profit.

For more information via the Internet, check https://www.firstcall.com.