Brokerage says Coast Savings is 'out of the woods': Persian Gulf war is called a boon for Litton Industries.

Brokerage says Coast Savings is `out of the woods'

The Los Angeles-based Bateman Eichler, Hill Richards regional stock brokerage recently issued commentary on the following local companies.

* Coast Savings, the financially troubled thrift, "is out of the woods," according to Bateman Eichler analyst Michael Abrahams, who added "the stock and the bonds remain highly speculative."

Coast Savings has been buying back its outstanding bonds in a hurry; in the fourth quarter the Los Angeles-based thrift bought back $93 million worth, at a deep discount. When a company buys back bonds at below par it is allowed, under accounting conventions, to post a profit, and Coast has, noted Abrahams.

Coast has also recently announced a "definitive agreement" to sell 19 San Diego branches to rival thrift Ahmanson for a $20 million profit.

Summed up Abrahams, "We believe the company's financial condition has materially improved ... and that current bondholders will receive timely payment of interest and principle on their bonds." Abrahams rates Coast stock a "hold." * Bateman Eichler analyst Paul Marsh calls Burbank-based Walt Disney Co. a "hold," noting that the entertainment giant's fourth quarter was its first down quarter in five years.

Disney posted a profit of $170 million in the fourth quarter, but that was off from $174 million a year earlier. Disney's films seem to be doing well, but its theme parks' operating earnings are 15 percent below last year. Theme park attendance is weak.

"Earnings weakness in the next few quarters may cause Disney to underperform the market," warned Marsh.

* Santa Monica-based FirstFed Financial reported flat fourth-quarter earnings, "which is good for an S&L," noted Bateman analyst Abrahams. The company also reported annual earnings of $3.11 a share in 1990, compared to $2.35 in 1989.

For 1991, FirstFed is expected to have earnings per share of $3.80, a 22 percent increase, said Abrahams. The thrift's stock is currently trading at a 20 percent discount to its book value. Nevertheless, Abrahams rates FirstFed a "hold." * The Persian Gulf war is a godsend to Beverly Hills-based Litton Industries, according to Lawrence Harris, a Bateman Eichler defense industry analyst.

"Litton benefits in three ways," said Harris. "It has a large resource exploration unit that benefits from higher oil prices; it is well-positioned to win the `peace shield' Saudi air defense contract; and a forthcoming marine assault on Kuwait City is likely to focus attention on Litton's amphibious landing vehicles."