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EARNINGS

April 23, 1985

SmithKline Beckman reported net income of $131.8 million for its first quarter, compared to $133.8 million for the period a year ago. The company said the year-ago quarter included a gain of $3.3 million, or 4 cents a share, from the sale of its industrial business group to Emerson Electric. Improved first-quarter results were helped by higher sales in the United States of its Tagamet ulcer drug as well as by better performance of antibiotic products, biomedical system instruments, eye and skin care and animal health operations. However, the firm noted that results were hurt by the effects of the strong dollar abroad.

Digital Equipment Corp. said its fiscal third-quarter profit fell 10% from a year earlier despite a 15.4% revenue gain. The firm added that its net income for the quarter ended March 31 fell to $91.7 million from $101.9 million a year earlier. Revenue climbed to $1.69 billion from $1.43 billion. Digital said that its U.S. sales were negatively affected by "cutbacks in capital spending in many industries" but that "business from customers in Western Europe and Japan and the government and communications sectors in the United States continued strong."

Citing a big boost in sales of bottled water, McKesson Corp. reported that revenue increased 14% during the fourth quarter ending March 31 and was up 15% for the fiscal year to $4.9 billion. Net income, which includes the results of discontinued operations, was up 8% in the quarter to $14.9 million. For fiscal year 1985, net income was down 5% to $64.9 million. Neil E. Harlan, chairman and chief executive, said three of the company's four operating groups closed out the year with strong gains in profitability. "For the full year, these groups--drug and health care, beverage and development--reported a 16% gain in operating profit," Harlan said. Bottled water sales helped to push the beverage group's operating profit up 50% to $11.3 million in the quarter and up 12% to $55.7 million for the year, a new high.

Holiday Inns reported that its return on average equity for the year ended March 29 increased to 14.3%, up from 12.8% for 1984. Revenue was $428.3 million, up 6.4% over the like period in 1984, while net income of $33.7 million increased 29.7% over last year's first-quarter net income of $26 million. "We are especially encouraged by the increase in operating income from our hotel and hotel-casino divisions. Excluding property transactions, operating income is up 12.9% over 1984's first quarter," said Michael D. Rose, chairman and chief executive. "Property transactions resulted in significant gains during the quarter, as we sold interests in three hotels. We also are pleased with the results of our financial strategy. By repurchasing a total of 7.6 million shares last quarter, we positively impacted both our earnings per share and our return on equity."

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