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GM HUGHES ELECTRONICS REPORTS EARNINGS

 GM HUGHES ELECTRONICS REPORTS EARNINGS
 DETROIT, Oct. 28 /PRNewswire/ -- GM Hughes Electronics Corporation


(NYSE: GMH) (GMHE) earned $155.2 million on revenues of $2.9 billion in the third quarter of 1992, Chairman Robert J. Schultz announced today. Earnings for the quarter increased $117.0 million and revenues were up $133.4 million over the same period of 1991. Earnings per share of GM Class H common stock for the quarter of $0.41 were up from $0.10 a year ago.
 (Because the earnings upon which dividends for GM Class H common stock are based exclude purchase accounting adjustments related to GM's acquisition of Hughes Aircraft Company, all earnings data reported herein exclude such adjustments.)
 The $117.0 million earnings increase was attributed to several factors including stringent cost controls and improved performance in automotive electronics manufacturing, increased earnings in various telecommunications activities, earnings of the missile business acquired from General Dynamics during the quarter, a gain recorded as a result of the formation of the Hughes-JVC Technology Corporation joint venture, and the absence of 1991 charges associated with the commercial simulation and training business.
 The revenue increase of $133.4 million, or 4.9 percent, was attributed primarily to increased sales related to new satellite contracts, sales from the acquired missile business, and increased sales from other defense electronics activities.
 For the first nine months of 1992, GMHE earnings were $501.2 million, or $1.26 per share of GM Class H common stock, on revenues of $8.8 billion, excluding the previously announced restructuring charge and accounting change at GMHE's Hughes Aircraft Company (Hughes) subsidiary. These results were up from nine-month earnings of $249.3 million (excluding accounting changes), or $0.62 per share, on revenues of $8.4 billion in 1991.
 Including the restructuring charge and accounting change, GMHE recorded a loss of $288.2 million, or $0.71 per share, for the first nine months of 1992.
 GMHE SEGMENTS: THIRD QUARTER HIGHLIGHTS:
 AUTOMOTIVE ELECTRONICS
 Financial Results:
 Revenues for the quarter were $809 million, down $86 million from the same period in 1991. The decrease was due primarily to a decrease in GM's North American vehicle production. Operating profit of $74 million was up by $49 million over the same period in 1991, reflecting cost controls, improved manufacturing performance, and reduced start-up expenses in the production of electronics for airbag and anti-lock brake systems.
 Business Highlights:
 -- GMHE's Delco Electronics Corporation subsidiary introduced a powerful new automotive computer that provides controls for rear-wheel anti-lock brakes in addition to fuel and emissions management. It makes its debut on selected 1993 Chevrolet and GMC S series trucks.
 -- A powertrain computer designed to help cars meet stringent 1993 California and 1994 Federal clean air regulations was also introduced. It will be installed on selected GM 1993 mid-sized cars.
 -- First shipments were made of a control computer for marine engines that offers significant improvements in fuel consumption, ignition, and engine performance. Engine controllers for non-automotive uses are a potential growth business.
 -- A new family of radios was introduced for Chevrolet's Geo line, featuring a top-of-the-line model that can play both cassettes and compact discs.
 -- Hughes introduced a line of commercial charging stations for electric vehicles that is being evaluated by automakers. Using Hughes' inductive coupler charging, drivers can recharge battery-powered vehicles by inserting a plastic-covered paddle into a slot. Electricity is transferred through a magnetic field rather than the more common plug-and-socket method, with significant safety and convenience advantages.
 TELECOMMUNICATIONS AND SPACE
 Financial Results:
 Revenues for the third quarter were $566 million, an increase of $128 million from the same period in 1991. The higher revenues were largely attributable to increased sales of commercial satellite programs and higher revenues from satellite transponder sales and operations. Operating profit was $76 million, an increase of $16 million over the comparable period in 1991. This improvement was primarily due to increased revenues from satellite operations and improved margins for telecommunications equipment sales.
 Business Highlights:
 -- The National Aeronautics and Space Administration (NASA) selected Hughes to produce the largest database and mass storage system ever built -- the Earth Observing System Data and Information System (EOSDIS). It will process, archive, and provide a vast storehouse of data about global change and its impact on the environment.
 -- The Arab Satellite Communications Organization (ARABSAT) selected Hughes to supply two new-generation HS-601 satellites. They will provide enhanced coverage for television and communications throughout the Arab world.
 -- An agreement with the government of Tatarstan of the Russian Federation to provide a digital wireless telephone system made a major step in commercial telephone technology. It will use satellite technology developed by Hughes to provide major advances in capacity and quality at lower cost.
 -- The first digital telephone service for airline passengers will be provided by Claircom Communications, a joint venture of Hughes and McCaw Cellular Communications. Agreements with Alaska and Southwest Airlines provide for 40 phones to be installed in each of 192 aircraft operated by the two carriers.
 DEFENSE ELECTRONICS
 Financial Results:
 Third quarter revenues were $1,309 million, an $81 million increase from the same quarter of the prior year. The increase was principally due to the missile business acquired from General Dynamics (GD) during the quarter, and increased revenues from the Peace Shield program as activity on that program increases. Operating profit for the period was $105 million, a $67 million increase over the comparable period in 1991. The increase was principally due to earnings from the acquired missile business, as well as improved operating performance on several major programs.
 Business Highlights:
 -- The acquisition of General Dynamics' missile systems business was completed and plans were announced to consolidate former GD missile production programs from several locations in California and Arkansas into Hughes' missile plant in Tucson, Arizona.
 -- New contracts were awarded to provide infrared sensors for a U.S. Air Force missile-tracking system, gunner's sights for a U.S. Army armored gun system, and shipboard radar equipment for the U.S. Navy; also, to upgrade an infrared/laser set for the U.S. Navy's A-6E aircraft, to produce components for missile fire control systems for U.S. Marine Corps and Taiwanese helicopters, and follow-on contracts from Saudi Arabia and Iceland for air defense systems.
 -- A line-up of new low-cost tactical inertial measurement units for aircraft navigation was introduced at Great Britain's Farnborough International Air Show in September. It is an application of Delco Electronics' revolutionary HRG (Hemispherical Resonater Gyroscope) inertial navigation technology.
 COMMERCIAL TECHNOLOGIES
 Financial Results:
 Revenues for the third quarter were $196 million, up $10 million from the same quarter of 1991. Commercial Technologies posted a $34 million operating loss during the quarter, compared with a $67 million operating loss recorded in the prior year. The components and training and simulation businesses continued to be adversely affected by the weak economy. The decreased loss reflected the absence of the 1991 charge associated with the commercial simulation and training business of the Hughes Rediffusion Simulation subsidiary.
 Business Highlights:
 -- Orders were received from Swissair and British Airways for flight simulators for commercial airline crew training and from the Malaysian government for military combat training.
 -- Hughes and Victor Company of Japan Ltd. (JVC) established a joint venture company, Hughes-JVC Technology Corporation, to manufacture and market large-screen projection systems for business, professional, and consumer markets worldwide. Shipments are scheduled to begin this year.
 GM HUGHES ELECTRONICS CORPORATION
 STATEMENT OF CONSOLIDATED INCOME
 AND AVAILABLE SEPARATE CONSOLIDATED NET INCOME
 (Dollars in millions
 except per-share Third Quarter Nine Months Ended Sept. 30
 amounts) 1992 1991 1992 1991
 Revenues
 Net sales
 Outside customers $2,044.9 $1,854.6 $5,870.2 $5,816.7
 General Motors and
 affiliates 794.7 870.6 2,846.5 2,508.8
 Other income-net 40.7(a) 21.7 116.1(b) 67.0
 Total revenues 2,880.3 2,746.9 8,832.8 8,392.5
 Costs and expenses
 Cost of sales and other
 operating charges,
 exclusive of items
 listed below 2,208.8 2,246.8 6,703.8 6,657.0
 Selling, general, and
 administrative
 expenses 305.3 305.5 937.5 912.3
 Depreciation and
 amortization 111.4 123.0 365.2 359.7
 Amortization of GM
 purchase accounting
 adjustments related
 to Hughes 30.9 30.9 92.8 92.8
 Interest expense 14.5 15.0 39.5 52.3
 Special provision
 for restructuring --- --- 1,237.0(c) ---
 Total costs and
 expenses 2,670.9 2,721.2 9,375.8 8,074.1
 Income (loss) before
 income taxes 209.4 25.7 (543.0) 318.4
 Income taxes
 (credit) 85.1 18.4 (202.0) 161.9
 Income (loss) before
 cumulative effect
 of accounting
 changes 124.3 7.3 (341.0) 156.5
 Cumulative effect
 of accounting
 changes --- --- (40.0)(d) 54.4(e)
 Net income (loss) 124.3 7.3 (381.0) 210.9
 Adjustments to exclude
 the effect of GM
 purchase accounting
 adjustments related
 to Hughes 30.9 30.9 92.8 92.8
 Earnings (loss) used
 for computation of
 available separate
 consolidated net
 income (loss) $155.2 $38.2 ($288.2) $303.7
 Available separate
 consolidated net
 income (loss) $28.8 $6.8 ($40.1) $58.8
 Earnings (loss)
 attributable to
 General Motors
 Class H common stock
 on a per-share basis
 Before cumulative effect
 of accounting
 changes $0.41 $0.10 ($0.61) $0.62
 Cumulative effect of
 accounting changes --- --- (0.10)(d) 0.13(e)
 Net earnings (loss)
 attributable to
 General Motors
 Class H common
 stock $0.41 $0.10 ($0.71) $0.75
 Certain amounts for 1991 have been reclassified to conform with 1992 classifications.
 (a) Includes $28.0 million pre-tax gain on sale of assets to Hughes- JVC Technology Corporation.
 (b) Includes $35.0 million pre-tax income from patent infringement settlement.
 (c) The one-time after-tax restructuring charge of $749.4 million, or $1.87 per share of GM Class H common stock, is primarily attributable to redundant facilities and related employment costs at Hughes.
 (d) Effective Jan. 1, 1992, Hughes changed its revenue recognition policy for certain commercial businesses from the cost-to-cost method to the units-of-delivery method. First quarter 1992 earnings were restated for the unfavorable effect of this change.
 (e) Effective Jan. 1, 1991, accounting procedures at Delco Electronics were changed to include in inventory general purpose spare parts previously charged directly to expense. Effective the same date, GMHE adopted Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes. First quarter 1991 earnings were restated for the favorable effect of this change.
 CONSOLIDATED BALANCE SHEET
 (Dollars in millions) ASSETS Sept. 30, Dec. 31,
 1992 1991
 Current assets
 Cash and cash equivalents $465.0 $348.3
 Accounts and notes receivable
 Trade receivables 804.1 705.0
 General Motors and affiliates 245.4 375.6
 Contracts in process 2,574.8 2,283.1
 Inventories 1,444.0 1,033.8
 Prepaid expenses 376.1 88.0
 Total current assets 5,909.4 4,833.8
 Property - net 3,425.4 3,409.5
 Intangible assets 3,704.9 3,766.9
 Investments and other assets 1,154.3 920.6
 Total assets $14,194.0 $12,930.8
 LIABILITIES AND STOCKHOLDER'S EQUITY
 Current liabilities
 Accounts payable
 Outside $730.2 $548.4
 General Motors and affiliates 76.8 106.7
 Advances on contracts 529.8 493.2
 Notes and loans payable 683.9 703.2
 Income taxes, including deferred amounts 126.0 226.7
 Accrued liabilities 2,178.5 1,206.8
 Total current liabilities 4,325.2 3,285.0
 Long-term debt and capitalized leases 709.5 147.1
 Other liabilities, deferred income taxes,
 and deferred credits 1,532.5 1,280.5
 Total stockholder's equity 7,626.8 8,218.2
 Total liabilities and stockholder's
 equity $14,194.0 $12,930.8
 Holders of GM Class H common stock have no direct rights in the equity or assets of GMHE, but rather have rights in the equity and assets of General Motors (which includes 100 percent of the stock of GMHE).
 PRO FORMA SELECTED SEGMENT DATA(1)
 (Dollars in millions) Third Quarter Nine Months Ended Sept. 30
 1992 1991 1992 1991
 Automotive Electronics
 Revenues
 Amount $809.2 $894.7 $2,895.3 $2,605.0
 As a percentage of
 GMHE revenues (pct) 28.1 32.6 32.8 31.0
 Operating profit(a) $73.7 $24.6 $349.3 $127.6
 Operating profit
 margin(b) (pct) 9.1 2.7 12.1 4.9
 Depreciation and
 amortization $23.2 $30.6 $90.3 $88.1
 Capital expenditures $50.2 $78.1 $200.1 $207.0
 Telecommunications and Space
 Revenues
 Amount $566.2 $437.7 $1,623.9 $1,245.9
 As a percentage of
 GMHE revenues (pct) 19.7 15.9 18.4 14.8
 Restructuring
 charge(c) --- --- $195.3 ---
 Operating profit
 (loss)(a) $75.5 $59.4 $(35.3) $134.1
 Operating profit (loss)
 margin(b) (pct) 13.3 13.6 (2.2) 10.8
 Depreciation and
 amortization(d) $28.4 $28.2 $86.3 $83.5
 Capital expenditures $(0.8)(e) $67.2 $101.8 $158.0
 Defense Electronics
 Revenues
 Amount $1,309.1 $1,228.4 $3,729.5 $4,017.0
 As a percentage of
 GMHE revenues (pct) 45.4 44.7 42.2 47.9
 Restructuring
 charge(c) --- --- $911.8 ---
 Operating profit
 (loss)(a) $105.4 $38.3 $(615.9) $232.4
 Operating profit (loss)
 margin(b) (pct) 8.1 3.1 (16.5) 5.8
 Depreciation and
 amortization(d) $47.5 $53.3 $152.2 $161.8
 Capital expenditures $16.1 $31.5 $69.8 $107.3
 Commercial Technologies
 Revenues
 Amount $195.8 $186.1 $584.1 $524.6
 As a percentage of
 GMHE revenues (pct) 6.8 6.8 6.6 6.3
 Restructuring
 charge(c) --- --- $129.9 ---
 Operating (loss)(a) $(34.3) $(66.8) $(208.2) $(81.7)
 Operating (loss)
 margin(b) (pct) (17.5) (35.9) (35.6) (15.6)
 Depreciation and
 amortization(d) $12.3 $10.9 $36.4 $26.3
 Capital expenditures $3.5 $13.4 $17.4 $25.8
 Corporate
 Operating (loss)(a) $(6.2) $(5.6) $(16.7) $(15.9)
 (1) The GMHE Consolidated Financial Statements reflect the application of purchase accounting adjustments related to the acquisition of Hughes by GM. However, as provided in the General Motors Certificate of Incorporation, the earnings attributable to Class H common stock for purposes of determining the amount available for the payment of dividends on Class H common stock specifically excludes such adjustments. In order to provide additional analytical data, the above GMHE unaudited supplemental pro forma financial data, which excludes the purchase accounting adjustments related to the acquisition of Hughes by GM, is presented.
 (a) Net sales less total costs and expenses other than interest expense.
 (b) Operating profit (loss) as a percentage of revenues.
 (c) Recorded in the second quarter of 1992.
 (d) Excludes amortization arising from purchase accounting adjustments related to GM's acquisition of Hughes amounting to $2.7, $2.7, $8.1 and $8.1 million, respectively, for the Telecommunications and Space segment; $25.6, $25.6, $77.0 and $77.0 million, respectively, for the Defense Electronics segment; and $2.6, $2.6, $7.7 and $7.7 million, respectively, for the Commercial Technologies segment.
 (e) Includes transfer of selected assets to inventory.
 -0- 10/28/92
 /CONTACT: Jack R. Harned of GM Hughes Electronics, 313-556-2025/
 (GMH) CO: GM Hughes Electronics Corporation ST: Michigan IN: CPR AUT SU: ERN


ML-DH -- DE002 -- 5832 10/28/92 09:34 EST
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Date:Oct 28, 1992
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