AlliedSignal’s Profit Up 13% on Strong Sales
AlliedSignal Inc., the world’s 10th-largest aerospace company by revenue, said Thursday its third-quarter net income rose 13% on strong sales of aircraft equipment and diesel-engine turbochargers.
The Morris Township, N.J.-based company also told analysts on a conference call that it’s cutting 1,500 jobs, representing 2% of its work force of 75,000. The company said the move will save about $100 million next year, and it’s looking at other ways to cut costs.
TRW Inc., meanwhile, said its third-quarter net income fell 4.1% because of a restructuring charge and lower prices for its auto parts.
AlliedSignal said its net income rose to $329 million, or 58 cents a share, from $292 million, or 50 cents, a year ago, as revenue rose 2.3% to $3.74 billion.
While AlliedSignal’s earnings met expectations, the earnings are overshadowed by the company’s $9.8-billion hostile bid for AMP Inc., the world’s largest maker of electronic connectors. A federal judge temporarily blocked AlliedSignal from beginning Thursday its consent solicitation for AMP shareholders to vote on expanding AMP’s board.
AlliedSignal said half the job cuts will be from subcontractors or temporary workers. Most of the cuts, some of which have been made in the aerospace unit, are voluntary, an AlliedSignal spokesman said.
TRW said its net income fell to $104.2 million, or 85 cents a share, from $108.7 million, or 85 cents, a year ago. Excluding a restructuring charge of 7 cents a share, per-share results were 92 cents, exceeding the 85-cent average estimate of nine analysts surveyed by First Call. TRW, the world’s largest maker of air bags, said profit before the charge rose 3%.
Sales rose 13% to $2.84 billion, bolstered by a 21% revenue increase at its space, defense and information systems unit.
Higher auto-parts shipments were partly offset by the strike at General Motors Corp., weak demand in Asia and Brazil and lower prices across most product lines.
Operating profit in the space, defense and technology unit rose 39% because of its 1997 acquisition of BDM International Inc., strong sales of its new gallium arsenide chip products and fees earned from some government space contracts. The automotive unit’s operating profit fell 23%.
At a Glance
Other earnings, excluding one-time gains and charges unless noted:
* Champion International Corp. said third-quarter profit rose 56% to $31.3 million, or 32 cents a share, far exceeding expectations of 24 cents, led by lumber and plywood shipments. Profit at its paper operation fell because of surging imports that are pushing down prices. Revenue fell 8.1% to $1.36 billion.
* Coca-Cola Co. reported third-quarter earnings of $888 million, or 36 cents a share, down 10% from $1.01 billion, or 40 cents, matching its recently reduced forecast as recessions and currency devaluations cut into results in Asia and Eastern Europe. The world’s largest soda maker said sales fell 4.2% to $4.75 billion. Coke said last month it would make less than expected in the quarter because of weak results overseas, its second warning in little more than a year. The company also said fourth-quarter earnings would decline and that Coke would invest in new coolers, vending machines and other items to spur sales in struggling nations such as Brazil, Japan and Russia.
* Hasbro Inc., the world’s second-largest toy maker, said third-quarter profit fell 3.2% to $74.9 million, or 55 cents a share, in line with reduced expectations from analysts surveyed by First Call Corp. Sales rose 3.3% to $945.5 million. Hasbro, the maker of Tonka trucks and Playskool toys, warned Sept. 28 that second-half profit would be less than expected because its biggest customer, Toys R Us, is cutting orders as much as $200 million. Before the warning, Hasbro had expected earnings of 60 cents.
* Monsanto Co., one of the world’s largest agricultural biotechnology companies, said third-quarter profit fell 16% to $87 million, or 13 cents, from $103 million, as it spends to develop new products and integrate acquired seed businesses. The results met analyst forecasts. Monsanto, which also makes drugs, said sales rose 15% to $1.99 billion. Sales were boosted by a $140-million payment from Pfizer Inc. under a marketing agreement for a Monsanto arthritis drug expected to go on the market in 1999. Monsanto on Tuesday ended a planned $35-billion merger with American Home Products Corp.
* Tricon Global Restaurants Inc. said its fiscal third-quarter operating profit jumped 88% to $91 million, or 58 cents a share, much better than the 52 cents analysts were expecting. Tricon said sales at its KFC, Taco Bell and Pizza Hut chains are rising on improved products and promotions. Revenue fell 13% to $2.01 billion, but sales at restaurants open at least a year rose 4% at Pizza Hut, 2% at Taco Bell and 5% at KFC.
* MORE EARNINGS: C2
