Publication: The Daily Herald
Chicago, IL, United States
Gould profits plummet 41% in second quarter
Citing an "abrupt downturn in the `economy.' Gould Inc. reported 41 per cent lower profits in the second quarter and said it expects further slippage in the current quarter.
The Rolling Meadows-based electrical and electronics concern said it earned $14.2 million, or 50 cents a share, on sales of $510.4 million. Net income in the second quarter was 41 percent below the same period a year ago although sales rose slightly. In the second quarter of 1979, Gould earned $24.2 million, or 86 cents a share, on $492.3 million in sales.
William T. Ylvisaker, Gould board chairman and chief executive officer, said the slumping general economy overall affected results for the period and will continue to hurt the company's performance during the third quarter.
"DUE TO THE CONTINUED depressed state of the economy, we anticipate a further decline in earnings in the normally slow third quarter with an improvement In the fourth quarter," Ylvisaker said.
The board chairman said performance in three of the company's four major business segments suffered, because of the overall economy. Only the electronics group posted an increase in profits, compared to the year-ago period.
The second quarter results also reflect an operating loss and a loss on the sale of the company’s interest in a joint-venture electrical products business, Gould-Brown Boveri. Gould said Monday it was selling its 50 percent interest in the joint venture to its Swiss partner, Brown Boveri and Co. Ltd.
In announcing its earnings, Gould said it would receive a total of $42 million for its interest in Gould-Brown Boveri, including about $10.5 million advanced to the joint venture, and the proceeds would be used to reduce corporate debt.
THE EARNINGS DECLINE in the second quarter erased the gain posted in the first three months of the year, putting Gould behind its performance for the first half of 1979.
In the first six months of the year, Gould's earning slipped 17.7 percent to $39.5 million, or $1.39 a share, on 7.9 percent higher revenues of $1.1 billion. In the first half of 1979, which became a record year in both sales and earnings, the company earned $48 million, or $1.72 a share, on sales of $979 million.