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EARNINGS

Seagram Earnings Fall 93% Despite Revenue Jump

May 30, 1996|From Times Wire Services

Seagram Co. said Wednesday that its earnings dropped 93% to $23 million in the first quarter from a year earlier, when it recorded a huge gain from the sale of DuPont stock.

But its earnings based on cash flow rose nearly 50% on new profit from the Dole juice business and Seagram's 80% stake in MCA, both of which were acquired in the last year.

Earnings before interest, taxes and other items that don't reflect the performance of the company's operations rose to $304 million from $203 million.

Net income was $23 million, or 6 cents per share, on revenue of $2.52 billion. A year ago, the company earned $3.3 billion, or $8.83 per share, on revenue of $1.28 billion.

Seagram's earnings would have been 61% lower than for last year's quarter even without the $3.2 billion from the DuPont sale factored in.

The company said results from MCA were down, hurt by investments in new artists and music labels and stronger marketing efforts related to new attractions at its Universal Studios theme parks in Universal City and Florida. The unit's movie and television operations improved, however.

At the company's annual meeting Wednesday in Montreal, Chief Executive Edgar Bronfman Jr. said it will probably be two to three years more before MCA's growth is where Seagram would like it.

He said buying MCA last year was "a very intelligent purchase" that is key to the company's international expansion. Together with the beverage business, MCA will help quench "an inexhaustible thirst for Western culture" around the world, he said.

MCA operates theme parks, Universal Pictures, MCA Records, Geffen Records and a television production unit. It also owns more than 40% of movie theater company Cineplex Odeon Corp.

Seagram completed its $5.7-billion purchase of the Universal City-based company from Matsushita Electric Industrial Co. of Osaka, Japan, last June.

Seagram's spirits operations, which include the Absolut vodka and Captain Morgan rum brands, performed poorly in North America and Asia, but that performance was offset slightly by improvement in Europe.

The beverage division reported stronger results on growth in its Tropicana juice business and the addition of the Dole brands.

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Litton Industries said its fiscal third-quarter earnings rose 9%, boosted by acquired businesses.

Net income for the period ended April 30 rose to $38.8 million, or 81 cents per share, from $35.6 million, or 75 cents, in the year-ago period. The results were in line with analysts' average estimate of 81 cents per share.

Woodland Hills-based Litton, which makes navigation and electronic systems, acquired PRC on Feb. 16 from Black & Decker for a preliminary price of $425 million in cash. PRC is a diversified information technology company with 1995 sales of $710 million.

On the same day, Litton completed its purchase of Teldix from Bosch Telecom of Germany. Teldix provides avionics and navigation equipment for several European weapons systems.

At a Glance:

Circus Circus Enterprises said fiscal first-quarter profit rose 24% on strong results at its Excalibur casino in Las Vegas and its Illinois riverboat, rising to $48.77 million, or 47 cents per share, compared with $39.4 million, or 46 cents, a year earlier.

Novell lost $55.4 million for its fiscal second quarter, primarily because of the sale of the former WordPerfect business. The loss amounted to 15 cents per share for the quarter, compared with earnings of $95.9 million, or 26 cents per share, in the same quarter last year.

Circle K said profit more than quadrupled in its fiscal fourth quarter, rising to $10.8 million, or 42 cents per share, compared with $2.2 million, or 10 cents, in the year-ago period.

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