Chesebrough-Pond’s 4th-Quarter Net Up 22.8 Percent
GREENWICH, Conn. (AP) _ Chesebrough-Pond’s Inc. reported Wednesday that profit for the fourth quarter of 1984 climbed 22.8 percent on the strong performance of the company’s health and beauty products, packaged foods, and Polymer divisions.
The earnings announcement came one day after Chesebrough-Pond’s announced a $1.25 billion tender offer for all common shares of Stauffer Chemical Co., based in Westport, Conn.
In the quarter ended Dec. 31, 1984, Chesebrough-Pond’s reported that net earnings climbed to $36.6 million, or $1.07 a share, up from $29.8 million, or 84 cents a share. Sales rose 12.7 percent to $489 million, from $434 million.
Ronald S. Ziemba, a Chesebrough-Pond’s spokesman, said new health and beauty products performed well partly because they didn’t require expensive marketing campaigns. Profits also continued to flow from the company’s new Ragu Chuncky Garden Style spaghetti sauce, he said.
Ziemba said the company’s new Polymer unit had a ″record year,″ which was also reflected in fourth quarter profits.
Chesebrough-Pond’s acquired its Polymer Corp. unit last year as part of its settlement with fianancier Carl Icahn. In the deal, it paid Icahn $66.8 million to buy back 1.8 million shares of its own stock. The company also paid $95 million for Polymer Corp., then a subsidiary of Icahn’s AFC Industries Inc.
For all 1984, Chesebrough-Pond’s reported that net earnings fell 6.6 percent to $120 million, or $3.40 a share, from $128 million, or $3.58 a share, in 1983. Sales climbed 10.2 percent to $1.86 billion, from $1.69 billion.
Company spokesman Kenneth R. Lightcap blamed some of the year’s declining profits on unwanted inventory acquired in the transition of the Bass shoe division to foreign-based manufacturers. He said the unit produced 70 percent of its footware in the United States until two years ago when most of those operations were moved to Brazil and Taiwan.
He said the two countries, particularly Brazil, now account for 80 percent to 90 percent of the division’s output. The process of transfering the business has been ″costly and temporary,″ Lightcap said. However, he declined to estimate the effect of moving expenses on earnings.
Lightcap also cited the strong U.S. dollar’s continuing impact on overseas earnings for hurting the year’s results. ″It’s still strong as heck,″ he said, ″and of course every dollar that comes back is less than it used to be in terms of our earnings.″
On Wall street, traders were still giving Chesebrough-Pond’s considerable attention Wednesday after Tuesday’s announced acquisition of Stauffer. Chesebrough-Pond’s was the fourth most traded issue on the Big Board, ending the day at $34.25, up 75 cents from Tuesday’s close.
Stauffer Chemical was the New York Stock Exchange’s most heavily traded company for the second day in the row. It closed Wednesday up 121/2 cents at $27.121/2 .
Chesebrough-Pond’s on Wednesday began offering shareholders $28 a share for Stauffer stock.
Chesebrough-Pond’s is a diversified worldwide manufacturere of branded consumer products. Some of its better-known items include Ragu, Health-Tex, Prince, Bass Weejuns, Pond’s, Vaseline, Cutex, Q-tips and a variety of perfumes.
Stauffer Chemical Co. and its U.S. subsidiaries manufacture and sell chemicals and chemical-related products worldwide.