Whittaker Corp. said Monday that the ending of its long-lucrative contracts to provide health services in Saudi Arabia contributed to sharply lower profit for 1985.
Net income for the year totaled $19.9 million, down from $43.9 million in 1984, on sales of $1.13 billion, down from $1.44 billion.
Whittaker's fourth-quarter results showed a net loss of $2.99 million on sales of $290.11 million, down from a $5.85-million profit on sales of $337.15 million a year earlier.
For the quarter, the company's life sciences division recorded an operating loss of $2.6 million, and its metals division had an operating loss of $1.97 million, while the technology, chemicals and marine divisions all operated profitably for the quarter--with technology reversing a $3.5-million operating loss in the same quarter in 1984.
"The decline in sales and operating profit during the current year are attributable primarily to the life sciences segment," said Joseph F. Alibrandi, president and chief executive. "During 1984 and the first quarter of 1985, the company completed performance on its Mideast health-care programs, which had been a major contributor of both revenue and operating profit." The Saudi government abruptly terminated the Whittaker contract in 1984, and the ending of work under it continued into 1985. The Los Angeles-based company earned about $23 million from that program, it said, but another $15 million of anticipated pretax income failed to materialize.
At the same time, the company ran up $13 million in start-up costs for its new national network of health maintenance organizations, Alibrandi said, and those costs will continue as development of the HMO network proceeds.
Whittaker also recorded a number of one-time charges in 1985 relating to goodwill, exchange rates and losses from selling its 8.3% stake in Smith International, the oil services company based in Newport Beach.
Whittaker, which paid about $24 a share for the Smith stock in 1982, sold its 1.59 million shares for $7.50 a share last Oct. 31--a $26.2-million loss, the company said. These unfavorable items totaled $53.8 million, the company added, offsetting a total increase of $54.1 million as a result of favorable rulings on federal income tax issues.
For detailed data and results of other companies, please see tables, Page 8.