Hefty Charge Leaves Boeing In Red For Quarter, Year

The Boeing Co. will take a charge of $1.4 billion associated with its merger with McDonnell Douglas Corp. and report a loss for the fourth quarter and for the full year of 1997, Chairman Phil Condit said Wednesday.

The charge represents an inventory valuation adjustment for Douglas Products Division as seen in the decision to discontinue the MD-80 and MD-90 models, company spokesman Larry McCracken said.

“Everybody understood that once we made a decision on the future of the Douglas aircraft line there would be costs associated with doing that,” he said.

The effect of Wednesday’s decision on employment will be announced later, after the company decides whether to consolidate facilities, the spokesman said.

Without the special charge, earnings and cash flow from operations will be within the range of investment analysts’ expectations, Condit said.

Final 1997 operating results will be announced next Tuesday.

In other earnings reports Wednesday:

Microsoft Corp., helped by continuing strong computer sales, had second-quarter profits up 52 percent from a year earlier, the software company said.

Microsoft reported record net income of $1.13 billion, or 85 cents a share on a diluted basis, for the three months ended Dec. 31. That compares with net income of $740 million, or 57 cents a share, a year earlier.

Revenues totaled $3.59 billion, up 34 percent from the $2.68 billion a year ago.

The earnings outpaced analysts’ consensus estimates, which had forecast about 82 cents a share.

For the first six months of its fiscal year, Microsoft had net income of $1.78 billion or $1.35 a share, up from $1.35 billion or $1.04 a share in 1996.

Spokane-based Potlatch Corp. reported lower earnings for the fourth quarter and full year of 1997, and blamed less favorable market conditions for most of the company’s products as well as fourth-quarter transportation problems.

Net earnings during the fourth quarter were $5.7 million, compared with $18.9 million for the same period in 1996, which excluded a $.5 million extraordinary charge for refinancing of debt. Fourth-quarter 1996 earnings were favorably affected by a reduction in the company’s tax rate, resulting from federal tax credits. Net earnings per share were 20 cents, vs. 65 cents in the fourth quarter of 1996 before the 2 cents per common share extraordinary charge. Net sales for the quarter were $379.8 million, down slightly from $381.5 million in 1996.

Net earnings for 1997 were $36.1 million, or $1.25 per share. For 1996, net earnings were $61.5 million, or $2.13 per common share, before an extraordinary charge of $3.4 million, or 12 cents per share, for debt refinancing. Net sales for 1997 were $1.57 billion, slightly higher than $1.55 billion reported for 1996.

Compaq Computer Corp. reported a 37 percent jump in profit in the fourth quarter, slightly beating Wall Street expectations, amid a 23 percent increase in sales.

Compaq, the world’s biggest maker of personal computers, said it earned $667 million, or 84 cents a share on a diluted basis and 42 cents a share after Tuesday’s two-for-one stock split. That was up from $487 million, or 63 cents on a diluted basis, in the year-ago period.

Sales rose to $7.32 billion from $5.97 billion.

Analysts surveyed by First Call had forecast Compaq to earn 83 cents per share. Compaq credited a jump in sales volume, buoyed by sales of sub-$1,000 PCs.