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Allied-Signal Reports Profit of $95 Million

October 22, 1985

Chairman Edward L. Hennessy Jr. reported that Allied-Signal Inc. had net income of $95 million in the third quarter.

The reported earnings only included $12 million of income from Signal Cos., because the merger of Allied and Signal was not completed until almost the end of the quarter.

Hennessy said Signal earned $80 million in the third period before the provisions for substantial acquisition-related expenses. Earnings of the two companies will be consolidated in the fourth quarter.

In the 1984 third quarter, Allied had net income of $126 million. Hennessy said the main reason for the lower Allied-Signal net was the earnings given up by Allied's sale of 50% of Union Texas Petroleum, its oil and gas subsidiary, last July.

Hennessy said the Union Texas sale had brought in $1.4 billion in cash, which helped finance the Signal acquisition and reduced debt.

Hennessy said: "At Allied-Signal, we are moving to increase per-share earnings by stock repurchases and by a significant streamlining of our businesses, which will include reorganization, divestitures and major cost reductions."

These efficiency moves will be announced in the fourth quarter, and provisions for their costs will be made against 1985 earnings.

Allied-Signal net income for the first nine months of 1985 was $381 million, compared to Allied's $389 million in the same period last year. Sales of $1.9 billion in the third quarter and $7.5 billion for the first nine months were below last year's totals of $2.6 billion and $8.1 billion, respectively.

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