Printer Friendly

PRECISION CASTPARTS CORP. REPORTS SALES AND EARNINGS

 PORTLAND, Ore., Oct. 13 /PRNewswire/ -- Precision Castparts Corp. (NYSE: PCP) today reported reduced sales and earnings for the quarter and for the six months ended Sept. 26. William C. McCormick, president and chief executive officer of the Portland-based manufacturer of investment castings for the aerospace, industrial turbine and health care industries, said that sales for the second quarter declined 10 percent to $107.9 million, down from $120.0 million in the prior year's second quarter. Net income for the quarter amounted to $5.5 million, down 8 percent from the $6.0 million for the same period last year. Earnings per share for the quarter increased 24 percent, from 34 cents per share in the prior year to 42 cents per share, while the number of shares outstanding decreased 27 percent as a result of the share repurchase completed in April 1993.
 For the first half of fiscal 1994, sales amounted to $209.3 million, a 14 percent decline from the prior year's $242.5 million. Net income fell 35 percent to $9.6 million, or 74 cents per share, from $14.7 million, or 83 cent per share, earned in the first six months one year earlier.
 In reporting results today, McCormick said that earnings for the six months included two unusual items reported in the first quarter. The company recognized a tax benefit of $2.4 million (18 cents per share) resulting from agreement with the IRS on tax issues relating to fiscal years 1990 and 1991, and a charge, also in the first quarter, of $2.9 million (22 cents per share) in recognition of the future cost of retiree health benefits as required by the Statement of Financial Accounting Standards No. 106. Without the two unusual items, earnings would have been $10.1 million, or 78 cents per share.
 McCormick said that both sales and earnings improved sequentially from the first quarter of the current fiscal year. Sales were up 6 percent from the preceding quarter and earnings, before taxes and the accounting change, increased 28 percent. "We are now seeing the effect of the restructuring we began in the third and fourth quarters last year. We are encouraged by the trend of increasing gross margins in a period when sales are lower than previous year," McCormick said. He also stated that increased revenues for the quarter included initial sales of components for the new GE90 super fan engine scheduled to power Boeing's new 777 transport. "We believe we have not yet seen the anticipated upturn in sales to the aerospace industry," he added.
 PRECISION CASTPARTS CORP. SUMMARY OF RESULTS
 (in thousands, except per share data)
 Three months ended Six months ended
 Sept. 26, Sept. 27, Sept. 26, Sept. 27,
 1993 1992 1993 1992
 Net sales $107,900 $120,000 $209,300 $242,500
 Cost of goods sold 91,200 102,000 177,100 203,100
 Selling and
 administrative
 expenses 7,200 8,700 15,100 16,700
 Interest expense,
 net 400 0 900 100
 Income before
 provision for
 income taxes 9,100 9,300 16,200 22,600
 Provision for income
 taxes(A) 3,600 3,300 3,700 7,900
 Income before
 cumulative effect
 of accounting
 change 5,500 6,000 12,500 14,700
 Cumulative effect of
 change in accounting
 for postretirement
 benefits other than
 pensions (net of
 income tax benefit
 of $1,800)(B) (2,900)
 Net income(C) $5,500 $6,000 $9,600 $14,700
 Income (charge) per
 share(D):
 Before cumulative
 effect of
 accounting
 change $0.42 $0.34 $0.96 $0.83
 Cumulative effect of
 change in accounting
 for postretirement
 benefits other than
 pensions ($0.22)
 Net income per
 common share $0.42 $0.34 $0.74 $0.83
 Backlog $309,600 $484,700
 (A) During the first quarter of fiscal 1994, the company recorded a $2.4 million tax benefit, equal to 18 cents per share, as a result of reaching agreement with the Internal Revenue Service concerning research and development tax credits for fiscal year 1990 and 1991.
 (B) In the first quarter of fiscal 1994, the company adopted Statement of Financial Accounting Standards (SFAS) No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," Under SFAS No. 106, the costs of retiree health care are accrued over relevant service periods. Previously, these costs were charged to expense as claims were paid. The company elected to immediately recognize the transition obligation, resulting in a one-time charge of $4.7 million, equal to $2.9 million after tax, or 22 cents per share. The expense to be accrued in fiscal 1994 is not expected to be materially different from the amount under the previous accounting method.
 (C) In the first quarter of fiscal 1994, the company retroactively adopted SFAS No. 109, "Accounting for Income Taxes," and the financial statements of prior years have been restated to apply the new method retroactively. The cumulative effect of this retroactive adoption resulted in a decrease to retained earnings of $3.4 million as of March 28, 1993. This retroactive adoption had no affect on previously reported net income for fiscal 1993.
 (D) Net income per share is based on 13,000,000 shares outstanding for the quarter ended Sept. 26, 1993, and 17,800,000 shares outstanding for the quarter ended Sept. 27, 1992.
 -0- 10/13/93
 /CONTACT: Roy Marvin of Precision Castparts, 503-653-4840/
 (PCP)


CO: Precision Castparts Corp. ST: Oregon IN: AIR SU: ERN

IC-RB -- SE005 -- 1463 10/13/93 07:50 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 13, 1993
Words:916
Previous Article:GLACIER WATER SERVICES REPORTS THIRD QUARTER AND NINE MONTH RESULTS
Next Article:FIBREBOARD REPORTS STRONG THIRD QUARTER EARNINGS
Topics:

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters