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AMP INCORPORATED REPORTS THIRD QUARTER AND NINE MONTHS RESULTS

 AMP INCORPORATED REPORTS THIRD QUARTER AND NINE MONTHS RESULTS
 HARRISBURG, Pa., Oct. 28 /PRNewswire/ -- AMP Incorporated (NYSE: AMP) Chairman and Chief Executive Officer Harold A. McInnes today announced current results and commented on the outlook. Highlights are as follows:
 THIRD QUARTER
 -- Sales up 15 percent to $847 million
 -- Earnings per share up 28 percent to 74 cents/share from year- earlier 58 cents/share
 -- Backlog up $3 million during quarter to record $534 million
 -- Employment up 100 during quarter to 25,100
 NINE MONTHS
 -- Sales up 8 percent to record $2.49 billion
 -- Earnings up 12 percent to $2.08/share
 -- Capital expenditures $227 million. Total for year to be similar to $313 million in 1991 and below record $338 million in 1990
 -- Outlook remains favorable
 -- Declares regular quarterly dividend of 38 cents/share
 Third quarter sales and earnings were higher than we expected. Our six months report said third quarter sales and earnings would be slightly lower than the second quarter, primarily because of the usual seasonal softening in Europe. We did experience a dip in international sales in local currency terms, but further growth in sales and improved margins in the U.S., and the decline in the value of the U.S. dollar, produced record worldwide sales and continued our earnings recovery. Record third quarter sales of $847 million were up 2 percent from the previous high of $827 million in the second quarter and were 15 percent above the $736 million in the year-earlier period. The decline in the U.S. dollar from the second quarter average level added about $30 million to sales and a couple of cents to earnings. The 74 cents/share earnings were up 28 percent from 58 cents in the year-earlier quarter and up 9 percent from 68 cents in the prior quarter.
 Nine months worldwide sales were up 8 percent to a record $2.49 billion from $2.30 billion in 1991. U.S. sales (41 percent of the total) were up 12 percent, with gains in nearly every major market. Strongest gains were in automotive, appliance, communications, networking and small computers/workstations -- while sales were flat in construction-related markets and down in the aerospace/military market because of industry conditions. Inclusion of Precision Interconnect Corporation, acquired last December, accounted for 2-3 percent growth of U.S. sales over the prior year. International sales (59 percent of the total) were up 2 percent in local currencies and 6 percent in U.S. dollars. The decline in the U.S. dollar from the average level of the year-earlier period added about $60 million to the nine months sales total.
 European sales (35 percent of the total) were up 4 percent in local currencies and 9 percent in U.S. dollars. Asia/Pacific sales (20 percent of the total) were down 4 percent in local currencies and unchanged in U.S. dollars. Sales in Japan were down slightly, while most of the other countries in the region showed good sales growth. Sales in the Western Hemisphere outside the U.S. (4 percent of the total) were up 8 percent in U.S. dollars. International sales growth by market categories was led by gains in the automotive and networking sectors.
 U.S. profit margins continued at a significantly higher level than the prior year--benefiting from good sales growth, the gradual firming of connector prices in many markets, and the productivity improvements arising out of our Plan for Excellence. Despite slow sales growth and continued pricing pressures in many markets, international margins have improved each quarter this year.
 OUTLOOK
 The outlook remains favorable, although we have become more cautious about the rate of economic growth expected in the coming months in the U.S., Europe and Japan. We have seen some slowing in October in the U.S. after unexpectedly strong sales growth in September. However, fourth quarter worldwide sales are expected to set a new high in the $860-$880 million range. With this growth, earnings can probably move up to the 75-80 cents range. For next year, we continue to agree with analyst estimates of $3.20-$3.50/share on 5-10 percent sales growth-- assuming a fairly constant value for the U.S. dollar and modest economic growth in the major industrialized countries.
 AMP is very well positioned to participate in the good growth expected in the diverse electrical and electronic markets we serve in the U.S. and over three dozen other countries. We are evolving from a connector company into a provider of total interconnection systems and value-added assemblies. Spending on research, development and engineering for new products, capabilities and processes this year will be similar to the record $313 million in 1991. Our emphasis on appropriate application tooling meets the rising customer demand for higher quality and productivity. The dramatic improvement in AMP quality, delivery and service in recent years was confirmed again last week when our Integrated Circuit Connector Products Division in Greensboro, N.C., was one of only three manufacturers recognized by the North Carolina Quality Leadership Award Council. Our goal is to grow at better than one and one-half times the 6-9 percent growth rate expected for the connector industry during the decade ahead. We believe we have the resources and strategies to achieve that goal.
 ORGANIZATIONAL CHANGES
 In a letter sent to shareholders in late September, we announced the following actions by the Board of Directors effective January 1, 1993:
 William J. Hudson (age 58), currently Executive Vice President- International, was elected President and Chief Executive Officer. With AMP since 1961, Mr. Hudson has an electrical engineering degree from Cornell University.
 James E. Marley (age 57), currently President and Chief Operating Officer, was elected Chairman of the Board. With AMP since 1963, he has aeronautical and mechanical engineering degrees from Penn State and Drexel.
 Harold A. McInnes (age 65) continues as a board member and was elected Chairman of the Executive Committee of the Board -- succeeding Walter F. Raab, retired AMP Chairman and CEO, who continues as a board member.
 That announcement noted that these actions continue the AMP tradition of evolutionary management succession, and that the AMP management team will continue to build on the successful policies and strategies now in place.
 Mark L. Miller, Treasurer since 1979, will retire at year end after 31 years of excellent service in financial management positions. Joseph C. Overbaugh, Assistant Treasurer since 1987, was elected to succeed him. A CPA, Mr. Overbaugh has been with AMP since 1973 in various auditing and financial management positions.
 Arthur Gerlinger was appointed divisional vice president-Latin America. A year earlier he had been appointed area director to fill the vacancy created by the appointment of Mr. Jean Gorjat to head our Asia/Pacific operations. Before becoming area director, Mr. Gerlinger was responsible for AMP Brazil for the prior five years.
 As previously announced, Pamcor's status has changed from that of an affiliate to that of a wholly-owned subsidiary. As a result, shareholders will no longer receive separate dividend checks and proxy statements from Pamcor. Pamcor manufactures AMP products in Puerto Rico.
 ACQUISITIONS/EXPANSION
 In August our joint venture, AMP-AKZO (Hauppauge, Long Island, New York), acquired a large (300,000 sq. ft.) printed circuit board manufacturing facility in Greenville, South Carolina, from Digital Equipment Corporation. AMP-AKZO produces very precise, high quality printed circuit boards using both a unique proprietary additive process and the conventional subtractive method. AMP-AKZO will support Digital's requirements and AMP's requirements in its panel assembly business, and expects to become a far more significant participant in the high-tech printed circuit board market.
 In September AMP acquired Electro Optics Products, a small unit within the DuPont Electronics Group. Located in Raleigh, North Carolina, it produces intelligent hubs and other networking hardware that complement the concentrator units and other networking products AMP introduced recently. While sales are only a few million dollars, the addition of Electro Optics Products provides expertise and market access to a higher technology level in a fast growing market.
 During the quarter our new tool and die making facility in India began operation. Our third plant in Singapore will begin operation soon. Construction has started on a manufacturing facility in Shanghai, China, which is expected to begin operation next year. Through these and other additions throughout the world, we continue to broaden and expand AMP's capabilities.
 DIVIDEND ACTION
 Today the Board of Directors of AMP Incorporated declared a quarterly dividend of 38 cents/share, payable December 1, 1992, to shareholders of record November 9, 1992. The total 1992 combined dividend of $1.52 per share is up from $1.44 in 1991 and $1.36 in 1990 and is the 39th consecutive annual increase.
 Harrisburg, Pa.-based AMP Incorporated is the world's leading producer of electrical/electronic connection devices. It has 25,200 employees in 165 facilities in the U.S. and 30 other countries. AMP stock is listed on the New York, Pacific and other regional stock exchanges (Symbol -- "AMP").
 AMP INCORPORATED & ITS SUBSIDIARIES
 Consolidated Statements of Income
 (Unaudited; dollars in thousands except per share data)
 Three months ended Sept. 30 1992 1991
 Net Sales $847,075 $736,318
 Cost of Sales 556,497 487,907
 Gross income 290,578 248,411
 Selling, General and Administrative
 Expenses. 146,806 132,307
 Income from operations 143,772 116,104
 Interest Expense (6,826) (9,761)
 Other Income (Deductions), net (8,019) (4,605)
 Income before income taxes 128,927 101,738
 Income Taxes 51,110 40,180
 Net Income 77,817 61,558
 Per Share - Net income $.74 $.58
 Cash dividends $.38 $.36
 Weighted average number of shares 105,188,969 105,850,212
 Nine months ended Sept. 30 1992 1991
 Net Sales $2,492,631 $2,304,350
 Cost of Sales 1,649,263 1,529,037
 Gross income 843,368 775,313
 Selling, General and Administrative
 Expenses. 442,147 415,861
 Income from operations 401,221 359,452
 Interest Expense (22,982) (31,407)
 Other Income (Deductions), net (15,595) (9,627)
 Income before income taxes 362,644 318,418
 Income Taxes 142,620 122,140
 Net Income 220,024 196,278
 Per Share - Net income $2.08 $1.85
 Cash dividends $1.14 $1.08
 Weighted average number of shares 105,634,132 105,900,503
 AMP INCORPORATED & ITS SUBSIDIARIES
 Consolidated Balance Sheets
 (Condensed; dollars in thousands)
 Sept. 30, 1992 Dec. 31, 1991
 (Unaudited)
 ASSETS
 Current Assets:
 Cash & cash equivalents $323,037 $370,829
 Marketable securities 69,337 80,167
 Receivables 630,876 589,212
 Inventories--
 Finished goods & work in process 252,165 246,187
 Purchased & manufactured parts 151,263 149,472
 Raw materials 45,189 44,943
 Total inventories 448,617 440,602
 Other current assets 151,973 135,559
 Total current assets 1,623,840 1,616,369
 Property, Plant & Equipment 2,738,437 2,550,406
 Less-Accumulated depreciation 1,537,854 1,370,236
 Property, plant & equipment, net 1,200,583 1,180,170
 Investments and Other Assets 213,600 210,356
 TOTAL ASSETS $3,038,023 $3,006,895
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current Liabilities
 Short-term debt $271,801 $336,660
 Payables, trade & other 257,245 250,605
 Accrued liabilities 305,521 301,142
 Total current liabilities 834,567 888,407
 Long-Term Debt 49,006 52,995
 Other Liabilities & Deferred Credits 184,814 152,450
 Total liabilities 1,068,387 1,093,852
 Shareholders' Equity 1,969,636 1,913,043
 TOTAL LIABILITIES AND SHAREHOLDERS'
 EQUITY $3,038,023 $3,006,895
 /delval/
 -0- 10/28/92
 /CONTACT: William Oakland of AMP, 717-780-6371/
 (AMP) CO: AMP Incorporated ST: Pennsylvania IN: CPR SU: ERN DIV


JS -- PH019 -- 5990 10/28/92 12:24 EST
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Date:Oct 28, 1992
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