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AlliedSignal keeps altitude
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April 13, 1999: 10:09 a.m. ET
Aerospace firm translates lower costs, higher productivity into higher gains
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NEW YORK (CNNfn) - Despite a slight drop in net sales, AlliedSignal Inc. used an increase in productivity and a lower cost structure to post record first-quarter earnings Tuesday, meeting Wall Street's expectations.
The Morris Township, N.J.-based aerospace company posted first-quarter profit of $335 million, or 59 cents a share, compared to earnings of $300 million, or 52 cents a share, a year earlier, a 12 percent increase.
Company officials said higher sales of aircraft safety avionics equipment, continued strength in aerospace after-market services and increased penetration of turbo-charged diesel engines in the European passenger car market all helped drive earnings upward.
Still, quarterly net sales were down 1 percent to $3.6 billion including divestitures predominately concentrated in its Performance Polymers and Specialty Chemicals & Electronic Solutions divisions.
Excluding those divestitures, sales rose 4 percent, including particularly strong growth in its Aerospace Systems division, where continued strong demand for commercial and military aircraft helped operating income rise 5 percent to $205 million.
The company also continues to reap the rewards of its ongoing cost-containment effort, which helped boost productivity 6 percent during the quarter while helping grow its operating margin to a record 14.1 percent from 12 percent a year earlier.
Overall costs and expenses dropped 4 percent to $3.1 billion while first quarter free cash flow after the payment of dividends was $219 million, more than triple last year's level of $62 million.
AlliedSignal was down 1-1/8 to 52 in early trading.
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Allied Signal
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