Sundstrand Cutting Hundreds of Jobs as Earnings Drop 35 Percent
ROCKFORD, Ill. (AP) _ Sundstrand Corp. announced a 35 percent drop in third-quarter earnings Monday and disclosed that it has cut several hundred jobs to cope with an increasingly bad slump in the airline industry.
Sundstrand attributed the drop in third-quarter earnings to declining sales of parts to commercial aircraft manufacturers.
″The weak results are forcing them to take action,″ said analyst Eli Lustgarten of PaineWebber Inc.
In June 1992 Sundstrand announced it would cut about 1,000 aerospace workers by the end of 1993. In August the Rockford-based company announced another 500 job cuts.
On Monday, Sundstrand said the aerospace cuts would total more than 2,100 by the end of this year, a 25 percent reduction in the division’s work force since mid-1992.
About 2,000 of those people already are gone, spokesman Brad Considine said.
″Even the 2,100 is an approximate number,″ he said, an indication that further cuts are possible.
He said more than half the cuts were white-collar jobs. About 500 jobs have been eliminated in Rockford, Considine said, with the rest of the cuts spread nationally among 10 Sundstrand plants.
Sundstrand projected a 15 percent decline in aircraft deliveries to airlines from 1993 to 1995, with a corresponding decline in orders for the parts that Sundstrand makes.
Sundstrand Chairman Harry C. Stonecipher said they anticipated those trends in 1992 but ″the intensive efforts by airlines to reduce inventories have caused a slump ... to be more persistent than we expected.″
Sundstrand reported net income of $17.1 million, or 49 cents per share, for the three months ended Sept. 30, compared with $26.3 million, or 73 cents per share, for the same period a year ago.
Those results include the Data Control division, which Sundstrand is selling to Allied Signal Inc.
Sales for the period fell 12 percent to $324.7 million from $369.6 million.
For the first nine months of 1993, Sundstrand had net income of $61.4 million, or $1.72 per share, compared with a loss of $160.9 million, or $4.46 per share a year earlier.
The year-ago results include a $205 million charge because of a change in accounting rules.
Sales for the three quarters fell 6 percent to $1.01 billion from $1.07 billion.
At the end of trading on the New York Stock Exchange, Sundstrand stock was down $1 at $37.25.