The Hechinger Co., whose stock has jumped $1.50 a share in the last two days of trading, yesterday reported a 33 per cent increase in profits for the third quarter ended Oct. 29.
Hechinger's said sales for the 13 weeks through Oct. 29 increased 10 per cent from $20.6 million to $22.3 million. Net earnings for the quarter jumped from $473.000 or 18 cents a share to $629.000 (23 cents a share).
For the first 39 weeks of the year, sales increased 15 per cent, from $1.26 million (48 cents) to $1.53 million (57 cents).
It was Hechinger's expansion into the Baltimore area rather than anticipation of the sharp gain in earnings that boosted the stock price, local brokers said yesterday.
Hechinger shares, which had traded over the counter in the $5.50 to $6 range recently, jumped on Friday to range recently, jumped on Friday today at 6 (elligible) bid. 7 (elligible) asked.
On Friday 3,600 shares of the stock were traded, compared with 100 shares the Friday before and 1,200 shares two weeks previously. Brokers said most of the buy orders came from Baltimore.
As part of its expansion out of the Washington market, the 19-store home center chain opened its first store in Baltimore County last week, a move that attracted the attention of investors there. Company officials and stock brokers confirmed that they had talked when the store opened.
"We bought a little of the stock on the street and some other Baltimore brokers were buying," said Bill Rothe of Alex Brown and Co.
A similar explanation of the jump in Hechinger share prices was offered by Robert Long of Johnston. Lemon and Co., the brokerage that makes a market in the stock. The stock is thinly traded and even a relatively small amount of buying pressure pushes up the price.
"Nobody looks at small companies these days, but somebody looked at this one," Long said.
He said the strong third quarter earnings could have an important impact on annual profits, because fourth quarter earnings are expected to be held back by the consolidation of the company's operations into a new warehouse operation at Ardwick. The Stanwyck Corp. reported net earnings of $276,000 (27 cents a share) for the second quarter ended Oct. 31, down from $637,000 (59 cents) a year ago.
Consolidated revenues for the quarter fell from $5.5 million to $4.9 million for the local management systems firm.
For the first half revenues fell from $10.1 million to $9.4 million, and earnings declined from $1.43 million to $878,000.
The company attributed most of the drop to lower contributions from Stanwick Internatioanl, a subsidiary providing maritime services to the government of Iran: it contributed 96 per cent of last year's profits, but only 82 per cent this year.