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THE TIMES 100 : RISING FORTUNES : A Recession That Played Favorites : Aerospace and S&Ls were among the hardest hit, but most companies actually improved their sales and income.

April 27, 1993|NANCY RIVERA BROOKS | TIMES STAFF WRITER

The California recession that wouldn't die saved a special fury last year for aerospace companies, savings and loan associations, real estate developers and apparel manufacturers.

Many of those companies saw sales shrink and profits plunge, if not disappear altogether, according to data compiled by STAR Services, a San Francisco-based business research firm, which tallied 1992 sales and income for publicly held companies with headquarters in California.

And yet, while some corporations suffered mightily last year, the state's public firms as a whole actually did a bit better.

Income in 1992 jumped to $19.9 billion, up 40%, and sales climbed to $436.3 billion, up nearly 6%. In 1991, profits fell nearly 21% and sales dropped almost 2%.

Profits for 1992 rose in seven broad industry categories surveyed for The Times and declined in two categories. Sales also rose in seven sectors and fell in two.

"The state fell into the tank in 1990 and continued to fall in 1991," said Jack Kyser, economist for the Economic Development Corp. of Los Angeles County, a private jobs-promotion group. The state showed modest improvement in some areas during 1992, although unemployment remained high, he said.

"What corporations did was batten down the hatches, streamline operations and just get back to improving productivity," Kyser said. "The pain was more concentrated in the south because of what was going on in aerospace and defense-related things and the service sector, which cascaded down to construction and real estate."

Between defense-budget cuts and the commercial airline slump, aerospace was the industry hit hardest in 1992, with income falling 7.4% to $1.2 billion and sales dropping 2.4% to $39.7 billion. The slowdown was reflected in the earnings declines of Rockwell International, Northrop Corp. and Rohr Inc.

Health care companies showed a 6% drop in earnings, primarily because of poor showings by some hospital management and medical supplies companies. Earnings fell at National Medical Enterprises, National Health Labs and Community Psychiatric Centers, among others. Sales for the sector increased 15.6%.

Financial service firms, particularly S&Ls that were buffeted by real estate problems, saw sales decline 2.9% to $52.7 billion. But earnings for the group jumped nearly 60% to $3.3 billion despite a 57% earnings plunge for thrift holding companies, including California Federal, Glenfed, Great Western Financial and H.F. Ahmanson & Co.

Profits among retailers soared 154% to $1.6 billion on an 8.5% sales increase to $57.6 billion. But a sharp rebound by Carter Hawley Hale Inc., which emerged from bankruptcy-court protection last year, masked the ho-hum performance by many other retailers, including MacFrugal's Bargains--Close-outs, Gap Inc. and House of Fabrics.

The energy sector showed a 46.3% profit jump to $3.9 billion, led by Chevron, Arco and Unocal, which have reaped the benefits of restructurings and asset sales. Sales rose 1% to $77.3 billion.

Hi-tech companies had a good year, posting a 59% profit increase to a total of $4.8 billion. Sales for the 242 companies in the category rose 16% to $96.9 billion. The sector was helped by computer software firms such as Oracle Systems Corp. (earnings up 165%) and computer manufacturer Apple Computer Inc. (earnings up 61.6%).

Profits in the entertainment and leisure group rose 45% to $1.1 billion. The 39-company group includes movie production companies, casino and hotel operations, theme parks, newspapers, broadcasting companies and fast-food operations. Sales increased 9.6% to $18.9 billion. Some of the big profit winners were Walt Disney Co., Spelling Entertainment, Hilton Hotels Corp. and Foodmaker Inc., which owns the Jack in the Box restaurant chain.

The state's nine public utilities posted income of $2.2 billion, up 8.9%, and sales of $20.6 billion, up 5.8%.

A catch-all category of "other" companies--among them toy, auto parts, building materials, business services, chemicals, soaps and cosmetics, food and manufactured housing companies--earned $660.9 million, up 20%. Sales rose 3% to $47.5 billion.

The pick-up in that sector came despite a loss of $68 million for apparel manufacturers, largely because of problems at L.A. Gear, and a $134 million loss for real estate developers.

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