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Accounting Change Helps Rockwell's 1987 Earnings

November 05, 1987|RALPH VARTABEDIAN

Rockwell International said Wednesday that it earned a record $635.1 million in the fiscal year ended Sept. 30, a 3.9% increase in profit over the $611.2 million posted the year earlier. But $105 million of the 1987 earnings was attributable to new pension accounting rules adopted by Rockwell.

The higher profit came on sales of $12.1 billion, a 1.6% decline compared to fiscal 1986 sales of $12.3 billion. Aircraft sales sank $614 million owing to the wind down of the B-1 bomber program, but sales in most other major business segments were up.

The company also disclosed that it took a $30-million writeoff in the fourth quarter on an unidentified defense electronics program.

In the fourth quarter, Rockwell earned $140 million on sales of $3.1 billion, down from profit the year before of $161.8 million on sales of $3.3 billion. The company ended the fiscal year with a government backlog of $12 billion, up from $11.6 billion last year.

Rockwell President Donald R. Beall said the company expects higher earnings in fiscal 1988, based on improvements in businesses other than aerospace, a lower federal tax rate and a reduction of taxes that have been already deferred on the B-1 program.

Aerospace earnings will be down in 1988, when B-1 production ends. B-1 profit peaked in 1987, as Rockwell's operating earnings on aircraft production soared 23% to $700 million.

The company said operating earnings for the full fiscal year in its general industries businesses were up 27% to $112 million, automotive earnings were up 7% to $164 million and electronics earnings were down 8% to $367 million.

Rockwell Chairman Robert Anderson said: "Fiscal 1987 was the firm's 12th consecutive year of increased earnings and the fourth consecutive year that return on equity has been in the 20% range."

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