PITTSBURGH -- Westinghouse Electric Corp. is expected to report a 30 percent to 40 percent decline in second-quarter profit.
The earnings drop comes as Westinghouse is trying to make broadcasting its largest unit by acquiring CBS Inc., whose ratings have slipped to third. It is negotiating terms for an expected offer of $5 billion.
The Pittsburgh-based conglomerate said it expects to disclose earnings today or tomorrow. It had warned Wall Street last month that earnings would fall to 10 cents to 11 cents a share.
That compares with $75 million, or 16 cents a share, in the second quarter of 1994.
Westinghouse said it expects operating profit to fall $30 million to $50 million short of expectations in power generation and nuclear energy, its second- and third-largest units.
Its biggest business is electronic systems, based in Linthicum, whose products include radar and anti-submarine warfare systems.
The company said weak U.S. demand for maintenance and repair services at power plants, intense price competition on steam and combustion-turbine generators and delays in closing power- generation orders overseas hurt sales.
Wall Street expects Westinghouse to earn 11 cents a share, BTC based on a survey of eight analysts polled by Zacks Investment Research. Westinghouse shares rose 25 cents, to $13.25, in trading of 2.55 million shares, more than the three-month daily average of 1.48 million. CBS shares fell 50 cents, to $74.75, in trading of 1.07 million, triple the daily average.
Negotiations with CBS resumed yesterday, people familiar with the talks said, without disclosing details. Westinghouse Broadcasting, known as Group W, owns five television stations and 18 radio stations.
Yesterday, Westinghouse agreed to sell Westinghouse Communities, its luxury real-estate development unit, for about $556 million to a group of investors led by Florida developer Al Hoffman.
Westinghouse will receive cash proceeds of $382 million and about $125 million in mortgages and securities. In addition, Westinghouse will retain a $48 million equity interest in WCI Communities L.P.