Profits Up in Early ’88 for Most Major Area Firms

Profits for most publicly held companies in the San Fernando Valley area rose in the first part of this year, in line with a nationwide trend in which profits surged in the first quarter.

Of 56 major companies in the area reporting results, 36, or nearly two-thirds, reported either improved earnings from a year earlier or a profit from a loss. Among the rest, 11 companies reported profit drops, with 9 reporting losses.

Nearly all of the results reported were for fiscal quarters that ended in March or April. Companies included in the survey are those with headquarters from Camarillo to Glendale.

Nationwide, corporate profits surged. According to a survey this month by the Wall Street Journal, net income for 509 major corporations climbed by an average of 24%.

Disney Leads Way

Walt Disney continued as the area’s most profitable company, despite a slight decline in its theme park attendence. The Burbank entertainment conglomerate earned $120 million, up 32% from the year-earlier period, with much of the increase due to revenue from the hit movies “Three Men and a Baby” and “Good Morning, Vietnam.”

Except for Disney, results for the area’s entertainment companies were sluggish.

MCA reported its profit fell 7% in the quarter to $26.9 million. The Universal City company’s interest expenses were up sharply in the quarter, to $15.5 million from $3.7 million a year earlier, mostly because of money borrowed to acquire New Jersey television station WWOR-TV last year and to buy back stock.

Dick Clark Productions also reported weaker results, which the company attributed to lower advertising revenue for first-run syndicated television shows. The Burbank production company posted a $401,000 profit, down 20% from a year earlier.

And Camera Platforms International, a Valencia company headed by movie director Hal Needham, reported an $816,952 loss. The company, which leases camera cars for use in filming, blamed the loss on its continuing investment in new products.

A lower tax bill helped boost profits for Lockheed Corp., the area’s largest company. Profits for the Calabasas aerospace company rose 33% to $114 million. The company estimated its effective tax rate for 1988 would be 24%, compared to 40% in 1987, which could boost its profits for the year.

Results were mixed for high- technology companies.

Dataproducts reported the biggest quarterly loss--$14.9 million--for any company in the area. The results for the Woodland Hills computer printer maker included a one-time charge to earnings of $15.8 million caused by two things: relocating a factory from New Hampshire to Woodland Hills and bringing back to the United States money invested overseas that will be subject to taxes.

Earnings Double

Micom, a Simi Valley maker of computer communications equipment that has continually cut costs the past three years, reported that its earnings more than doubled to $4.7 million.

Micropolis, a Chatsworth maker of high-performance data storage equipment used in computers, earned $7.2 million, up 16% from a year earlier.

Tandon, which sold its sluggish disk drive operations to Western Digital and is now putting its efforts into making personal computers, earned $7.2 million, up 39% from a year earlier. The Chatsworth company said the profit margins on its products improved considerably.

Profits for the area’s insurance companies were generally down because insurance claims went up.

20th Century Industries, a Woodland Hills automobile and home insurer, reported its profit fell 12% to $7.6 million. Its insurance operations actually lost $8.4 million in the quarter, but the deficit was offset by a 29% jump in net investment income to $12.3 million.

Republic American Corp., citing higher workers’ compensation claims, saw its earnings drop 27% to $5.4 million. Like 20th Century, the Encino company’s profit was bolstered by investment income, which was $6.1 million in the quarter.

But Zenith National Insurance, a Woodland Hills insurance company, reported its profit rose 5% to $12.6 million, in part because of gains in its workers’ compensation insurance business.

Savings and loans generally reported lower profits. Valley Federal’s earnings fell 68% to $1.4 million. The Van Nuys savings and loan said the rates for its adjustable-rate mortgages dropped faster than the rates paid for deposits.

Glenfed Inc., the Glendale holding company for Glendale Federal Savings, also cited the drop in rates for adjustable-rate mortgages in explaining why its earnings fell 24% to $36.2 million.

Citadel Holding

Citadel Holding, the Glendale-based parent of Fidelity Federal, reported its profit rose 36% to $6.1 million. But the increase was due to depressed year-earlier results, which included a $3.9-million charge related to the settling of lawsuits.

Among the area’s fastest-growing companies, Martin Lawrence Limited Editions reported its earnings climbed 135% to $1.3 million. Sales for the Van Nuys chain of art galleries jumped 74% to $8 million.

Cherokee Group, a fast-growing apparel company in North Hollywood, saw its profits rise 16% to $2.9 million. And United Education & Software, an Encino chain of trade schools that has grown rapidly through acquisitions, reported its profits rose 154% to $1.1 million.

QUARTERLY PROFITS FOR VALLEY-AREA COMPANIES Results are for quarters ended in March and April

Profit Company (loss) % Change Cherokee $2.9 million +16% Dataproducts ($14.9 million) N/A* Walt Disney $120 million +32% Glenfed $36.2 million -24% Lockheed $114 million +33% Martin Lawrence $1.3 million +135% MCA $26.9 million -7% Micropolis $7.2 million +16% Olson Industries ($415,000) N/A* Superior Industries $3.0 million +15% Tandon $7.2 million +39% 20th Cent. Industries $7.6 million -12% United Education $1.1 million +154% & Software Valley Federal $1.4 million -68% Zenith National $12.6 million +5%

* NA: Not applicable