Despite a $648,000 net loss on airline operations and an $11.9-million write-down by its oil and gas operation, PSA Inc. on Wednesday reported that its net income rose 111% to $26.8 million and revenues rose 13% to $779.9 million for 1985.
PSA Inc. reported that for the fourth quarter, net income rose 262% to $10.5 million and revenues rose 19% to $202.3 million.
The performance of PSA Inc.'s aircraft leasing subsidiary, which benefited from $8.4 million in investment tax credits during the fourth quarter, helped offset a $6.2-million fourth-quarter loss by Pacific Southwest Airlines and an $8.9-million write-down generated by oil and gas investments that PSA made during the fourth quarter.
PSA's loss of $648,000 for the year on its airline operations compares with a $11.5 million loss for the year before.
Nevertheless, PSA Inc. remained "pretty much on target with what I expected," said Greg Kieselmann, an airline industry analyst with Morgan, Olmstead, Kennedy and Gardner in Los Angeles. "Their fourth quarter has historically not been a good one."
"I look for some improvement this year," Kieselmann said. "Barring a continuation of fare wars, their yields are moving up."
The net loss on airline operations was bad news for PSA employees who, in 1984, traded wage cuts and increased productivity for a profit-sharing plan. That agreement promised employees 15% of the airline's pretax income.
Although airline operations generated $2.1 million in profit-sharing money during the first three quarters, the fund was eliminated during the fourth quarter as PSA's profits were squeezed by continuing West Coast fare wars and poor weather that forced cancellation of flights to the Pacific North-west.