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Sunbeam lacks 3Q luster
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November 9, 1999: 10:07 a.m. ET
Maker of Coleman lamps, stoves posts wider-than-expected 47-cent-a-share loss
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NEW YORK (CNNfn) - Sunbeam Corp. Tuesday unveiled a third-quarter loss wider than analysts had anticipated as the maker of blenders and electric blankets struggles to regain its profitability.
Sunbeam (SOC) recorded a loss $47.4 million, or 47 cents a diluted share, an improvement over the $188.9 million, or $1.88 a share, it lost a year earlier. But the result was significantly off analysts' expectations of a 30-cent a share loss, according to First Call.
Excluding one-time charges of about $96 million, Sunbeam posted an operating profit of $4.3 million compared to a loss of $161 million in the third quarter of 1998. Revenue rose 21 percent to $602 million from $496 million.
"With these results and our second consecutive quarter of strong revenue growth and positive operating profits it is clear we're on the right track," said Sunbeam Chief Executive Jerry Levin.
For a second quarter, Levin credited Y2K concerns for helping boost revenue as customers purchased portable gas lanterns, stoves and other outdoor goods in preparation for the worst.
Sunbeam has been struggling to right itself after the ouster last year of CEO "Chainsaw" Al Dunlap. Dunlap, who actually relished the name "Chainsaw," was accused of using phony accounting methods to determine Sunbeam's profitability -- a move that led to his termination in June 1998.
Dunlap was fired after a tumultuous 23-month tenure during which he fired more than 11,000 employees and saddled the company with a huge amount of debt.
Since then Levin has been trying to turn the company around by streamlining operations, getting rid of non-profitable parts of the business and restructuring the company's outstanding debt.
As part of that, Sunbeam said Tuesday that it plans to sell off its Eastpak business along with certain "non-essential assets." It expects to earn approximately $200 million from the sales, which it will use to pay down its outstanding debt.
"After completing our long-range strategic business reviews, we determined that Eastpak, while a fine, well-performing company, did not fit with Sunbeam's overall portfolio of businesses," Levin said.
Sunbeam also announced that it has filed with the Securities and Exchange Commission to change some of its private placement debt into publicly traded zero-coupon bonds. The SEC had previously declined to register the securities, which were initially filed under Dunlop's direction, because of incomplete accounting information.
For the first nine months, Sunbeam posted a loss of $155 million, or $1.54 a share, compared with a loss of $587.1 million, or $4.96 a share, in the first nine months of 1998. Sales rose 35 percent to $1.8 billion.
Sunbeam shares were up 7/16 to 4-15/16 in early Tuesday trading.
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Sunbeam
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