Westinghouse expects earnings drop

March 08, 1994|By David Conn | David Conn,Sun Staff Writer

Westinghouse Electric Corp., the Pittsburgh-based defense and electronics giant, said yesterday that it expects its first-quarter income will be sharply lower than a year ago because of poor results in its nuclear energy and environmental divisions.

In a statement released yesterday, Westinghouse Chairman and Chief Executive Michael H. Jordan said earnings in the quarter that ends March 31 will drop to 4 cents a share, from 14 cents a year ago.

"I indicated that first-quarter earnings would be off during the meeting we had with security analysts in January and, most recently, when we reported our 1993 year-end results, so none of this should come as a surprise to stakeholders," Mr. Jordan said in a statement released after the stock market closed. The company's stock closed yesterday at $14.125 a share, down 37.5 cents.

Those 1993 results revealed a company still struggling to restructure in the wake of recent defense cutbacks.

Last year the company lost $326 million, including $478 million in the fourth quarter alone. In the 1993 first quarter, the company reported a $64 million profit.

Since November 1992, Westinghouse has sold a handful of large divisions and laid off several thousand employees in Maryland and around the country.

Westinghouse, the state's largest manufacturer, has cut the work force at its Linthicum-based Electronic Systems Group to about 10,000, from 17,000 in 1991.

Westinghouse said yesterday that the decline in its first-quarter 1994 operating profits mainly will becaused by poor performances in the nuclear energy business of its power systems segment and by two companies in the environmental group that are due to be sold.

Quarterly earnings also will be lower because of higher pension expenses and reduced income from licenses, and because an accounting change boosted income a year ago.

"While I am disappointed that first-quarter results will not be better, I am pleased with the significant events that have taken place in the same period," Mr. Jordan said.

He referred to the $1.1 billion sale in January of the company's distribution and control business to Cleveland-based Eaton Corp. and the $340 million sale last month of its Westinghouse Electric Supply Co. to a New York buyout firm.

Those sales helped Westinghouse reduce its total debt to less than $4 billion at the end of February, compared with $8.4 billion a year ago.

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