Westinghouse profitable in '94

January 27, 1995|By Kevin L. McQuaid | Kevin L. McQuaid,Sun Staff Writer

Westinghouse Electric Corp. announced yesterday that it narrowed its fourth-quarter loss and posted a profit for the year, the result of cost-cutting measures and gains in virtually all segments, including its Linthicum-based Electronic Systems Group.

The Pittsburgh-based conglomerate, one of Maryland's largest private employers with roughly 10,500 workers, reported net income for the year of $77 million, 7 cents per share, on revenues of $8.84 billion.

Those figures reversed a loss of $32 million, $1.07 per share, on revenues of $8.87 billion for the year ended Dec. 31, 1993. In recent years, the company -- whose diverse businesses include defense contracting, broadcasting, power generation and energy systems -- has terminated thousands as it has struggled to cope with the continuing shrinkage of Pentagon contracts.

"We are now clearly seeing the results of our focused marketing and customer initiatives, together with our aggressive cost-reduction efforts," said Mike Jordan, chairman and chief executive of Westinghouse. "We believe that these efforts will continue to improve our competitiveness."

Despite the overall gains, Westinghouse in the fourth quarter of 1994 generated a net loss of $107 million, or 30 cents per share, on revenues of $2.76 billion. The quarter results compare to a net loss of $478 million, $1.38 per share, on revenues of $2.64 billion in 1993.

Westinghouse also said it will continue to take charges against earnings as part of a plan to restructure and eliminate 6,000 jobs.

As of Dec. 31, Westinghouse had eliminated 4,300 jobs through layoffs and attrition as part of a two-year plan, and had identified 1,200 additional positions in the fourth quarter that would be targeted for termination.

The company in 1994 took after-tax charges of $246 million to deal with costs associated with continued restructuring and a pension settlement.

It also absorbed higher pension costs of $64 million. A company spokesman said that the new round of layoffs would take place companywide, and that no segment in particular -- including Electronic Systems -- would feel the brunt of the layoffs.

"We're getting the sense that there's a different urgency in this company," said Nicholas P. Heymann, a NatWest Securities Corp. analyst who tracks Westinghouse.

Had Westinghouse not taken the charges, its 1993 earnings would have been $323 million, or 71 cents per share.

In 1993, the company spent $644 million on an after-tax basis to contend with restructuring charges, discontinued operations and accounting changes. Without those charges, the company would have posted 1993 earnings of $318 million, or 76 cents per share.

Results for the Electronic Systems Group in 1994 included operating profit of $164.6 million on sales of $2.46 billion. While the operating profit nearly doubled from a year ago, sales were down by 5 percent. At year-end, the group had a backlog of $3.9 billion, compared to $3.84 billion at the end of 1993. In the fourth quarter, orders amounted to $993.3 million, against $900.5 million in the fourth quarter of 1993.

Electronic Systems, which provides systems for commercial customers and government agencies such as the U.S. Department of Defense, improved on the basis of increased air traffic control deliveries, its acquisition earlier in the year of Norden Systems and its restructuring activities, the company said.

Westinghouse's stock closed yesterday at $13.875, up 12.5 cents, in New York Stock Exchange trading.

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