Westinghouse profit up 12% overall, but Linthicum division lags

October 21, 1994|By Ted Shelsby | Ted Shelsby,Sun Staff Writer

Westinghouse Electric Corp. yesterday reported a 12 percent gain in net income during the third quarter, but its local division continues to suffer from a decline in Pentagon orders.

The Pittsburgh-based company reported that operating profit at its Electronic Systems Group in Linthicum fell 26 percent in the three months that ended Sept. 30, compared with the same period last year, despite a 7 percent gain in revenue.

Westinghouse trumpeted the overall improvement as evidence that Westinghouse's long cost-cutting efforts are finally paying off.

"Clearly our focus on cost-reduction efforts is beginning to drive the bottom line," Chairman and Chief Executive Officer Michael H. Jordan said. "These efforts should continue to show improvements in our results over the next two to three years."

As part of a restructuring, Westinghouse has been selling business units, cutting debt and eliminating thousands of jobs. More than 7,000 positions have been eliminated in Maryland in the last four years.

The third-quarter results were in line with analysts' expectations, and Westinghouse stock fell 37.5 cents yesterday, to close at $13.125.

The quarterly gain in revenues for the local division was attributed to its acquisition earlier this year of Norden Systems Inc., the defense electronics arm of United Technologies Inc. Without the Norden acquisition, the company said, Electronic Systems' revenues would have been down 3 percent.

The company attributed the drop in Electronic Systems' operating profits to reduced torpedo production at a plant near Cleveland, the end of some Defense Department contracts and an increase of $5 million in pension costs.

Electronic Systems posted operating profits of $39.2 million for the quarter, down from $52.9 million for the same period in 1993.

For the first nine months of the year Electronic Systems' operating profit was $100.4 million, down 35 percent from a year ago.

For the company as a whole, Westinghouse had net income in the quarter of $73 million, or 15 cents a share. This compares with earnings of $65 million, or 15 cents a share, for the same period last year. Operating profit for the quarter jumped $25 million, to $168 million.

Net income for the first nine months was $184 million, or 38 cents a share, on revenues of $6.1 billion. This compares with net income of $152 million, or 32 cents per share, on revenues of $6.2 billion for the same period last year.

Westinghouse reported that some other operating divisions are doing well. Broadcasting reported a 27 percent jump in operating profit, on revenues that were 4 percent higher, during the quarter.

Higher fees at three Department of Energy facilities managed by Westinghouse and improved sales and margins in the incineration business drove operating profit at its Government and Environmental Services unit up 87 percent and revenue up 20 percent.

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