W.R. Grace Says Profit Dropped by 80 Percent

W.R. Grace & Co., the Columbia chemical maker recently indicted for its conduct in a Montana mining town, reported that first-quarter profit fell by 80 percent in part because of costs related to its four-year-old Chapter 11 bankruptcy and legal expenses related to the Montana case. The company said earnings dropped to $3.1 million (5 cents a share) from $15.8 million (24 cents) in the comparable period last year. The company's sales increased 16.3 percent in the period ended March 31, to $603.2 million from $518.5 million.

Grace took a $10 million hit for interest it agreed to pay to creditors that provided the company with loans or services before it filed for bankruptcy protection in April 2001. Its reorganization plan is pending before a bankruptcy court judge in Delaware.

The company has also spent $6 million defending itself and seven current and former executives accused by federal prosecutors of exposing mine workers in Libby, Mont., to deadly asbestos and covering up the danger. The joint trial is scheduled for September 2006, the company said.

An additional $4 million went toward pension expenses adjusted for expected life spans and amortization of deferred costs related to capital market returns in recent years.

Grace released its results after the close of financial markets.

• CACI International Inc. said yesterday that profit rose 37 percent in its third quarter as national security spending led to higher revenue. The Arlington government contractor reported earnings of $21.6 million (71 cents a share) in the period ended March 31, up from $15.8 million (53 cents) in the corresponding quarter last year.

Revenue climbed 44 percent, to $414.9 million from $288.4 million, driven by national security and intelligence projects, the global war on terrorism, and government agency restructuring.

Fundings from all contract sources rose 17.5 percent, CACI said. The Defense Department accounted for 73 percent of the company's quarterly revenue. The company said improved efficiency from the integration of its acquired Defense and Intelligence Group more than offset costs for compliance with accounting regulations, stock expenses and Iraq-related costs.

CACI raised its guidance for the rest of the year, saying it expects to post fourth-quarter earnings of 71 cents to 74 cents per share on sales of $415 million to $425 million.

• General Dynamics Corp. reported a 25 percent increase in profit in the first quarter, buoyed by a favorable tax audit. The Falls Church maker of submarines and weapon systems said it earned $336 million ($1.66 a share), up from $269 million ($1.34) in the comparable period last year. The company said it paid $69 million in taxes during the quarter after resolving a federal audit, just more than half as much as it paid during the year-ago period. Revenue rose 3.7 percent, to $4.82 billion from $4.64 billion.

The company's marine systems unit continued to struggle, reporting a 5.5 percent drop in revenue to $1.21 billon and a 50 percent drop in operating earnings to $49 million. The unit reported a $19 million charge related to a contract to build commercial tankers that incurred delays because of bad weather in San Diego, company officials said.

Shares of General Dynamics' stock fell 3.4 percent, to close at $100.72.

• Capital One Financial Corp., a McLean credit card and consumer loan company, said its first-quarter earnings grew 12 percent. Capital One said growth in its loan portfolio as well as a lower loan charge-off rate and better operating efficiency were the main reasons. The company earned $506.6 million ($1.99 a share), compared with $450.8 million ($1.84) in the first quarter of 2004. Total assets on March 31 were 13 percent higher than a year earlier, at $55.63 billion. The company's total loans, including loans it has sold to investors but still manages, were $81.59 billion, a 14 percent increase. Capital One is expected to complete a merger with Louisiana-based banking company Hibernia Corp. in the third quarter.

• LaSalle Hotel Properties, a Bethesda company that owns hotels nationwide, said funds from operations in its first quarter were $8.3 million, up from $3.2 million during the corresponding period last year. Funds from operations is a common measure of performance for real estate investment trusts. LaSalle reported profit of $189,000, up from a $3 million loss during the comparable period last year. However, after distributing funds to preferred shareholders, the company recorded a $2.9 million (10 cents a share) loss to common shareholders.

Compiled from reports by Washington Post staff writers and the Associated Press.