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Rockwell Reports Earnings Up 14.6% for Quarter

November 02, 1995|JOHN O'DELL | TIMES STAFF WRITER

SEAL BEACH — Capping a fiscal year in which it continued to successfully shift from an emphasis on defense contracts to a focus on commercial products, Rockwell International Corp. said Wednesday that fourth-quarter earnings totaled $189 million, up 14.6% from $165 million a year earlier.

The higher fourth-quarter results ended a fiscal 1995 in which soaring demand for the Seal Beach-based company's commercial products pushed profit and sales to record levels.

Rockwell's net profit for the year ended Sept. 30 rose 17% to $742 million, the diversified aerospace, high-tech electronics and industrial company reported. Sales increased 17% to $13 billion from $11.1 billion in 1994, the company said.

One of the stars has been Rockwell's Semiconductor Systems division in Newport Beach, which posted a 31% increase in sales for the year to $760 million and is expected to top $1 billion in sales in fiscal 1996. Rockwell recently announced a $400-million expansion of the Newport Beach facility.

It is the largest capital investment for an industrial project in the county in recent years and is expected to create about 1,300 high-technology research and manufacturing jobs over the next five years.

"This has been a terrific year and [Semiconductor Systems] is one of the units driving our performance," Rockwell Chairman Donald R. Beall said Wednesday.

In the last decade, the company has engineered what industry analysts say is a remarkable turnabout, shifting its emphasis from government and defense work to commercial businesses such as semiconductors, printing presses and factory automation systems.

Government and defense work, which accounted for 66% of Rockwell's revenue in 1986, brought in only about 25% of the revenue in fiscal 1995, Beall said. Defense contracts alone now represent about 16% of Rockwell's sales, down from 55% in 1986, he said.

Rockwell does not report individual divisions' contributions to corporate profit, but Dwight Decker, president of the newly formed Semiconductor Systems unit, said the high margin business's annual profit provided a significant part of Rockwell's overall earnings increase.

Sales for the division, which specializes in the chip systems for high-speed modems, facsimile devices and wireless communications products, have grown at 25% a year for the past five years, making it the company's fastest-growing business unit, Decker said.

For the fourth quarter, sales rose 23% to $3.5 billion from $2.9 billion.

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