PITTSBURGH -- Westinghouse Electric Corp.'s second-quarter operating profit fell 6.9 percent as weaker results at its power-systems businesses offset gains in broadcasting, and a charge for environmental costs resulted in a bottom-line loss.
The largest U.S. broadcasting company also said yesterday that it expects third-quarter earnings to drop from the second quarter because advertising revenue and ratings at its CBS television network declined during NBC's Olympics coverage.
Profit from operations fell to $27 million, or 6 cents a share, from $29 million, or 4 cents, in the year-earlier quarter. Last year's per-share results reflect preferred dividends.
Revenue increased 53 percent to $2.22 billion from $1.45 billion, propelled by the CBS acquisition.
Lower prices and a decline in demand for services caused a wider loss in its power-generation unit, and profit fell at its nuclear energy systems unit. Rising ad sales and cash flow at its 39 radio stations and CBS television network were positive developments, analysts said.
"Radio is looking good and it's likely to get better," said Greg Drahuschak, an analyst at Janney Montgomery Scott. "We knew CBS wasn't going to be a huge, instant money-maker in one or two quarters."
Analysts said Westinghouse's $5.4 billion purchase of CBS Inc. last year is slowly paying off as the Pittsburgh-based company prepares to separate its media and industrial businesses and complete its $3.9 billion acquisition of Infinity Broadcasting Corp.
In the latest quarter, a charge of $116 million, or 26 cents a share, for pollution cleanup costs resulted in a net loss of $89 million, or 20 cents.
In the year-ago quarter, a charge of $4 million, or 1 cent a share, to cover firings, and profit from discontinued operations of $34 million, or 9 cents, made net income $59 million, or 12 cents share.
Westinghouse rebounded from a first-quarter loss from continuing operations caused by interest costs related to the CBS purchase and its struggling power generation and nuclear energy systems units.
Westinghouse's group of 14 television stations was hurt by lower network ratings. Operating cash flow at the stations fell 13 percent to $97 million from pro forma results of $111 million year ago, Westinghouse said. Revenue fell to $226 million from pro forma results of $237 million.
On the industrial and technology side, sales fell 3 percent to $1.11 billion as operating profit fell 61 percent to $24 million from $62 million, Westinghouse said.
The operating loss in power generation widened to $20 million from $13 million. The operating profit in nuclear energy fell to $13 million from $33 million, excluding charges.
In the first six months, Westinghouse's loss from continuing operations was $89 million, or 20 cents a share. That compared with a year-earlier profit from continuing operations of $20 million, or a per-share loss of 1 cent after payment of preferred dividends.
Pub Date: 8/07/96