Westinghouse's earnings drop 50%

July 16, 1991|By Ted Shelsby

With Westinghouse Electric Corp. reporting that earnings fell 50 percent during the second quarter, Chairman Paul Lego said that there are more tough times ahead for the company. "Our expectations of an early and strong economic recovery have not materialized," Mr. Lego said in releasing Westinghouse's financial results Friday.

"That, coupled with the fact that many of our businesses customarily lag the economy, will adversely impact our second half" of the year, he said.

The 50 percent earnings decline for the second quarter was blamed in part on the flat performance of Westinghouse's big Electronic Systems Group, which is based in Linthicum.

Westinghouse earnings also were off sharply for the first six months of the year, while sales for both the first and second quarters were down slightly.

"Earnings for the second half will be down 25 percent from the 1990 second-half results, which, excluding the effect on the 1990 fourth-quarter special provision for losses at Financial Services, were $1.84 per share," Mr. Lego said.

The company reported that revenues from its Electronic Systems Group, the bulk of which is in Maryland, were flat for the quarter and first six months of this year, compared with 1990. The company added that operating profits for the group were moderately lower in both the second quarter and the six-month period.

Earlier this year, the local Westinghouse unit, the state's largest manufacturing employer, was forced to lay off about 1,200 workers when the Pentagon canceled the Navy's A-12 attack-aircraft program. Westinghouse was under contract to supply the main radar and an infrared system for the A-12 aircraft.

Mr. Lego said that the operating profits of its broadcasting operations were "down substantially" for the periods.

Sharply lower or significantly lower operating profits also plagued the company's Power Systems, Environmental Systems, Financial Services and Industries units. Knoll Group earnings were down for the second quarter but were higher for the six-month period.

Three months ended 6/30/91

G; .... ....Revenue.... .... .... Net.... .... .... Share

....3,174,000,000.. .... 127,000,000 .... 0.41

'90.... ....3,175,000,000.. .... 252,000,000 .... 0.86

% change.... -.03..... ..... .... -49.6..... ...... -52.3

Six months ended 6/30/91

G; .... ....Revenue.... .... .... Net.... .... .... Share

....5,951,000,000.. .... 225,000,000 .... 0.75

'90.... ....6,037,000,000.. .... 462,000,000 .... 1.57

% change.... -1.4..... ..... .... -51.3..... ...... -52.2

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