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AMP INCORPORATED REPORTS RESULTS

 AMP INCORPORATED REPORTS RESULTS
 HARRISBURG, Pa., Jan. 22 /PRNewswire/ -- AMP Incorporated


(NYSE: AMP) today reported that near-record fourth quarter sales of $791 million were up 2 percent over $778 million in the year-earlier quarter.
 A summary of the highlights follows:
 YEAR 1991:
 Sales -- Up 2 percent to record $3.09 billion from $3.04 billion.
 Earnings -- Down 3 percent to $2.45 per share from $2.70 per share in 1990.
 FOURTH QUARTER 1991:
 Sales -- $791 million, up 2 percent from $778 million in year- earlier quarter; up 7 percent from $736 million in preceding quarter.
 Earnings -- 60 cents a share, down 5 percent from 63 cents a share in year-earlier period; up from 58 cents in preceding quarter.
 Backlog -- Up $18 million during quarter to $525 million (includes $12 million added by acquisition of Precision Interconnect Corporation); up $11 million for year.
 Capital Expenditures -- $310 million, down from record $338 million in 1990; 1992 spending expected to be similar to 1991.
 Employment -- Steady during quarter, up 300 for year to 25,000.
 DIVIDEND:
 Dividend increased to 38 cents per share from 36 cents per share in 1991. Indicates $1.52 per share in 1992 from $1.44 per share in 1991.
 Sales had set a new quarterly high of $792 million in the first quarter of 1991, then declined to $776 million in the second and $736 million in the third quarter -- reflecting the effects of recessionary conditions in the United States and Europe and continued price erosion. The higher sales level in the fourth quarter over the third quarter resulted from a modest increase in the company's daily sales rate in the United States, continued growth in international sales, and the lower average value of the U.S. dollar. However, while fourth quarter earnings of 60 cents per share were up slightly from the third quarter, earnings were down 5 percent from the 63 cents per share in the year-earlier quarter, and were slightly below earlier expectations. Quarterly earnings improved to 66 cents per share in the first quarter of 1991 and then declined to 61 cents per share in the second and 58 cents per share in the third quarter.
 For the entire year, sales rose 2 percent to a record $3.09 billion from $3.04 billion in 1990. U.S. sales were essentially flat -- $1.22 billion vs. $1.24 billion in 1990. European sales were up 2 percent in local currencies and less than 1 percent in U.S. dollars to a new high of $1.07 billion. Asia/Pacific sales were up 8 percent in local currencies and 14 percent in U.S. dollars to a new high of $664 million. Sales in the Americas outside of the United States were down 10 percent to $136 million as both Brazil and Canada showed modest declines.
 U.S. sales to distributors (over 20 percent of the U.S. total) were up modestly in 1991. Sales to appliance, automotive, computer/office machines and industrial/commercial equipment manufacturers were up slightly, while sales to the aerospace/military, telecommunications equipment, and maintenance/repair markets were down slightly. In Europe, sales were up in Austria, Denmark, Germany and Spain, and flat or down in all other countries. Sales to the networking market continued to show good growth. Despite the significant decline in overall European car production, automotive sales remained steady because of new products, greater market penetration, and AMP's strong position in the German market where car production was up. In the Asia/Pacific region, sales continued to grow in all countries except recession-affected Australia and New Zealand, and in Singapore where the computer peripherals market was soft. Regional sales were up in virtually all market categories.
 Earnings declined 9 percent to $2.45 a share from $2.70 a share in 1990. Lower sales prices, together with moderate increases in the cost of services and wages, and higher depreciation charges, reduced operating margins. Pretax margins were further eroded by higher interest charges and a swing in foreign currency transaction results from a gain in 1990 to a loss in 1991. These non-operating cost increases accounted for slightly more than one-half of the decrease in pretax income. Depreciation/amortization charges rose to $252 million in 1991 from $218 million in 1990 and $180 million in 1989. Profit margins were therefore lower in the United States and Europe, while good sales growth allowed modest margin improvement in the Asia/Pacific region. The effective tax rate increased to 38.6 percent in 1991 from 37.9 percent in 1990, principally because of increases in Pennsylvania statutory corporate tax rates. Without the Pennsylvania increase, earnings would have been several cents higher.
 Pricing erosion of AMP products throughout the world, estimated at 3-5 percent per year since the mid-1980s, continues to be an important factor. The company said it believes the list price increase actions it took a year ago in the United States, Japan and several other countries did result in reducing the overall average rate of erosion. Pricing should firm up when demand picks up sufficiently to result in a higher rate of utilization of connector industry capacity.
 OUTLOOK:
 While the outlook is rather uncertain, AMP agrees with the consensus economic forecast that the U.S. economy will slowly resume growth in the coming months. With customer inventories apparently lean, AMP's U.S. business should participate directly in this anticipated improvement. This year is starting out with a moderate seasonal pickup in AMP's U.S. sales and flat international sales. The companyn expects first quarter sales to set a new high, modestly above year-earlier and prior quarter levels, and earnings to improve over the fourth quarter's 60 cents a share. Assuming a first half pickup in the U.S. economy, the European economic picture could begin to improve in the second half and thus allow sales growth to resume there. While the Japanese economy is slowing, it is still expected to achieve a fairly good rate of growth by most countries' standards, and therefore permit continued growth in AMP's sales there. The rest of the Asia/Pacific region, which is a steadily increasing portion of the total region, should continue to show good sales growth.
 Based on the above expected economic scenario, AMP indicated at its Dec. 12, 1991, financial analyst meeting that it expects 6-8 percent sales growth in the United States and Europe, and 12-15 percent growth in the Asia/Pacific region in local currencies. Analysts' consensus earnings estimates of $2.80-$3 a share based on this sales growth and constant currency exchange rates during 1992 still seem reasonable.
 In 1991 AMP continued its strategy of building capabilities for long-term growth while achieving fairly good short-term profitability, maintaining RD&E spending (record $265 million in 1991) at nearly 9 percent of sales, and internally financing its expansion. Capital spending, which nearly doubled from $172 million in 1987 to $338 million in 1990, was maintained at a high level of $310 million in 1991. "We see good growth ahead for electronics for many decades and are broadening our participation through many new connection products, a widening range of application tooling, a growing emphasis on value-added assemblies, strategic alliances and acquisitions, and timely entry into new geographic areas," the company said.
 NEW SUBSIDIARIES/EXPANSION:
 During 1991 AMP established wholly owned sales subsidiaries in Malaysia and Thailand, and a wholly owned manufacturing subsidiary in India which will make production tools and dies for other AMP companies. Facilities expansion in 1991 included completion of a large regional warehouse in the Harrisburg area, a more than doubling in size of the Shrewsbury, Pa. plant, and new or enlarged buildings in Australia, France, Germany, Italy, Japan, South Korea and Spain. Facilities under construction include a plant addition in Japan, a third plant in Singapore and the company's first plant in India.
 ACQUISITIONS/STRATEGIC ALLIANCES:
 On Dec. 6, 1991, AMP completed the acquisition of Precision Interconnect Corporation ("PI") of Portland, Ore., announced in the third quarter report. PI is a leader in high performance specialty cables and cable assemblies for high growth markets such as medical electronics. This acquisition is part of AMP's our growing emphasis on broadening its role in interconnection systems by providing high-value, high-technology cables, cable assemblies and panel assemblies.
 In December AMP also acquired a minority interest in BroadBand Technologies Inc. of Research Triangle Park, N.C. BroadBand is pioneering in the development of systems for the "fiber to curb" networking market that is expected to emerge in the near future. This action is part of the increasing role AMP is playing in the fast growing networking interconnection market.
 ORGANIZATIONAL CHANGES:
 William J. Hudson, executive vice president-International, was elected to the AMP board of directors. With AMP for 30 years, Hudson has headed up all international operations for the past year and the Asia/Pacific region for the prior seven years. Corporate Vice President John E. Gurski has been reassigned to the newly created position of vice president, Business and Operations Planning-International, reporting to Hudson. With AMP for 19 years, he previously headed up the U.S. Capital Goods Business Sector. Jay Hassan was elected corporate vice president- Technology and Strategic Products. With AMP since 1988, he previously was divisional vice president-Technology.
 Four new divisional vice presidents were appointed (years with AMP): Keith Drysdale, Corporate Logistics (five years); Peter Glaser, European Manufacturing (18 years); J.C. Tan, South Central Asia (17 years); and Anthony Zettlemoyer, Corporate Planning (19 years).
 AMP said it was very saddened by the deaths in recent months of four former AMP executives who played key roles in AMP's history. Samuel S. Auchincloss was AMP president from 1965-1971, CEO from 1967-1971, and a director from 1962-1972. Cleve J. Fredricksen joined AMP in 1941 and was chief financial officer for many years, chairman of the board from 1975-1981, and a director from 1942-1989. James T. Gavin joined AMP in 1965 and was corporate controller from 1986-1991. Herman C. Haas joined AMP in 1950, and was corporate vice president-Marketing from 1974-1981.
 DIVIDEND ACTION:
 The board of directors of AMP Incorporated increased the regular quarterly cash dividend to 38 cents per share, payable March 2, 1992, to shareholders of record Feb. 3. The current rate indicates an annual dividend of $1.52 per share for 1992 compared to $1.44 in 1991, $1.36 in 1990, and $1.20 in 1989, and would result in the 39th consecutive annual increase.
 Harrisburg-based AMP Incorporated is the world's leading producer of electrical/electronic connection devices. It has 25,000 employees in 160 facilities in the United States and 29 other countries. AMP stock is listed on the New York, Pacific and other regional stock exchanges (Symbol - "AMP").
 AMP INCORPORATED
 & its Subsidiaries and Pamcor, Inc.
 COMBINED STATEMENTS OF INCOME
 (Unaudited; dollars in thousands except per-share data)
 Three months ended Dec. 31 1991(A) 1990
 Net Sales $791,000 $777,713
 Cost of Sales 541,000 531,146
 Gross income 250,000 246,567
 Selling, General and
 Administrative Expenses 140,000 135,168
 Income from operations 110,000 111,399
 Interest Expense (10,000) (11,819)
 Other Income (Deductions), net 4,000 7,375
 Income before income taxes 104,000 106,955
 Income Taxes 41,000 40,430
 Net Income $63,000 $66,525
 Per Share - Net income 60 cents 63 cents
 Cash dividends 36 cents 34 cents
 Weighted average number
 of shares 105,823,946 105,955,628
 12 months ended Dec. 31 1991(A) 1990
 Net Sales $3,095,000 $3,043,589
 Cost of Sales 2,070,000 2,012,394
 Gross income 1,025,000 1,031,195
 Selling, General and
 Administrative Expenses 556,000 543,437
 Income from operations 469,000 487,758
 Interest Expense (41,000) (38,321)
 Other Income (Deductions), net (5,000) 12,575
 Income before income taxes 423,000 462,012
 Income Taxes 164,000 174,900
 Net Income $259,000 $287,112
 Per Share - Net income $2.45 $2.70
 Cash dividends $1.44 $1.36
 Weighted average number
 of shares 105,882,591 106,312,110
 (A) Unaudited and subject to further adjustment.
 /delval/
 -0- 1/22/92
 /CONTACT: William Oakland of AMP, 717-780-6371/
 (AMP) CO: AMP Incorporated ST: Pennsylvania IN: CPR SU: ERN DIV


LJ -- PH031 -- 2396 01/22/92 14:30 EST
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