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Most Leading Firms in Valley Area Report Gains in Quarter

March 04, 1986|JAMES BATES | Times Staff Writer

Despite continued weakness among electronics and computer equipment businesses, the financial performance of the leading companies in the San Fernando Valley area generally improved in the last quarter, with nearly all showing a profit.

A survey of the financial results of 40 of the largest publicly held companies based in the area extending from Burbank to Camarillo found only five reporting losses during fiscal quarters ended in December and January. Three months ago a similar survey showed about one-quarter of the area's public companies, including some of the largest, posting quarterly losses.

Moreover, the new survey found that only about 20% of the companies earned less money than in the corresponding quarter the year before. Three months ago, nearly half of the firms posted declines.

Profits in the latest quarter were strongest at entertainment concerns, such as MCA, and at large aerospace and manufacturing firms, including Lockheed, Zero and Superior Industries.

Slim Profits

Even though profits at computer equipment firms were hurt by the prolonged industry slump, the Valley's top two high-technology companies--Dataproducts and Tandon--returned to profitability. Their profits were slim, however, and came mostly from cost-cutting and discontinued inventory write-downs.

Dataproducts, a Woodland Hills-based maker of computer printers, posted a $1.0-million profit in its latest quarter after losing $31.3 million in the two previous quarters.

Tandon, a Chatsworth disk drive and personal computer company, earned $841,000 in its most recent quarter after suffering five straight quarterly losses and a $135.4-million loss in its 1985 fiscal year ended Sept. 27.

The biggest loss posted by any of the companies surveyed was Computer Memories' deficit of $21.3 million. The loss stemmed mostly from write-downs and payments made to settle a patent infringement case brought by Milpitas-based Quantum. Computer Memories, a Chatsworth-based maker of disk drives, has said it expects further losses because of the expiration of its contract with IBM.

The strongest performance among the computer equipment concerns came from Micropolis, a Chatsworth disk drive maker, which posted a $2.3-million profit after reporting a loss of $371,930 during the same period the year before.

More typical were the earnings for Micom, a Simi Valley maker of computer communications equipment. Its profit fell 39% to $4.2 million.

SFE Technologies Loss

Results also were soft at electronics firms that rely on the computer industry. San Fernando-based SFE Technologies lost $2 million in the quarter ended Jan. 24, a widening of its loss of $869,000 in the same period the year before.

The picture was much brighter in the entertainment industry. Universal City-based MCA, continuing to benefit from the hit movie "Back to the Future" and improved results in its music and book businesses, showed a 178% increase in earnings to $51.7 million. Disney, based in Burbank, showed an 8% increase in profits to $34.7 million.

Lockheed, the Burbank-based defense giant that is the largest public company based in the Valley area, posted a 17% increase in earnings to $128 million. But Sherman Oaks-based TransTechnology, another defense and aerospace firm, suffered a 34% decline in its earnings--to $1.3 million--mostly because of slower than expected product shipments.

Superior Industries, a Van Nuys maker of automotive wheels, reported a 7% increase to $1.7 million. Zero Corp., a maker of metal cases and cabinets, earned $3.8 million, up 38%, an increase that stemmed partly from a land sale.

Earnings at the areas's largest banks and savings and loans were improved by cost-cutting and relatively low and stable interest rates. Van Nuys-based Valley Federal, the largest locally based financial institution, earned $3.7 million, a reversal from a $3.2-million loss a year earlier.

Some of the brightest earnings reports came from the smaller but relatively fast-growing companies. Amgen, the Newbury Park biotechnology firm, showed an $85,000 profit after losing $1.9 million the same quarter a year earlier.

American Ecology, a Calabasas-based hazardous-waste disposal firm, posted a 63% increase in profit to $2.4 million.

Several of the area's biggest companies--including Olson Industries, Nu-Med, 20th Century Industries and House of Fabrics--have not reported results for their most recently completed quarters.

QUARTERLY PROFITS AT VALLEY FIRMS

Results are for quarters ended in December.

Net Income Company (loss) % Change Computer Memories ($21.3 million) NA Dataproducts 1.0 million -90 Disney 34.7 million 8 Fairmont 1.7 million 271 Lockheed 128.0 million 17 MCA 51.7 million 178 Micom Systems 4.2 million -39 Micropolis 2.3 million NA Superior 1.7 million 7 Tandon 841,000 NA TransTechnology 1.3 million -34 Valley Federal 10.4 million NA Zero 3.8 million 38 Zenith National 535,000 -85

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