Westinghouse posts large loss in first quarter

April 11, 1992|By Liz Atwood | Liz Atwood,Staff Writer

Pittsburgh-based Westinghouse Electric Corp. lost $246 million in the first quarter, mainly because of a charge for employee retirement benefits.

Westinghouse said its loss amounted to 72 cents a share in the three months that ended March 31, in contrast to a profit of $98 million, or 34 cents a share, a year earlier.

Chairman Paul E. Lego said the results were in line with the company's expectations.

"While some of our businesses are recording slight improvements in order rates, most of our businesses are late cycle and have yet to experience increased order activity," he said.

Operating profits at the company increased 24 percent, to $194 million, from $157 million in the year-ago period.

Mr. Lego said the boost came from Westinghouse's cost-cutting efforts last year, when it laid off 4,000 workers.

The operating profits were less than some analysts expected, however.

The company closed on the New York Stock Exchange yesterday at $17.875, down 25 cents.

Judy C. Meehan, an analyst with Parker Hunter in New York, said some analysts were disappointed that Westinghouse's cost-saving measures weren't more effective. "We expected to see more as a result of the layoffs," she said.

The company's net loss, which Westinghouse said was expected, stemmed from a $742 million charge for retirement benefits. The charge came from accounting changes that required Westinghouse to report some retirement benefits as they accrue, rather than when they are paid.

The impact of the change and related tax benefits reduced after-tax earnings by $338 million.

Many other companies also have taken big charges for such benefits to comply with new accounting rules.

Excluding the accounting charge, Westinghouse posted first-quarter income of $92 million, or 27 cents a share, down 6 percent from the 1991 period, which included proceeds from the sale of the company's Bryant Division.

First-quarter revenue rose 1.8 percent, to $2.83 billion, from $2.78 billion a year earlier.

Operating profits for the Electronics Systems segment, which is based in Linthicum and has 13,000 employees in Maryland, were up substantially, the company said, thanks to cost reductions and increased revenues.

Although defense-related work continues to account for the bulk of the group's revenues, the local division is expanding its commercial business, which accounts for about 30 percent of its revenue. The company hopes to increase that proportion to 35 percent this year.

In the Broadcasting Group, which includes WJZ-TV, Channel 13, in Baltimore, revenues were flat, but operating profits were up for the first quarter.

The company's Financial Services segment continued to do poorly, however, because of the slumping real estate market. Revenues in that division were down substantially from 1991, and operating margins were at break-even.

Westinghouse Credit's first quarter profit declined to $4.2 million on revenues of $195.7 million, from $21.2 million, on revenues of $258.2 million, a year earlier.

Three months ended 3/31/92

.. .. .. ..Revenue .. .. .. ..Net ..Share

'92 $2,826,000,000 $(246,000,000) (0.72)

'91 $2,777,000,000 .. $98,000,000 ..0.34

% change .. ..+1.8 .. .. ... ..-- .. ..--

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