American Motors Corp. said yesterday record Jeep sales and a goning up of its passenger car business gave it a record $26 million fourth quarter profit and pushed its fiscal 1978 earnings to $36.7 million - a five-year high.
It was the eighth consecutive profitable quarter for the No. 4 U.S. auto firm. The record earnings surpassed the generally bullish expectations of Wall Street analysts.
However, AMC's profits again were tagged primarily to its Jeep operation, which posted record sales of 180,667 units for the fiscal year. Passenger car sales were down 5.6 percent for the year, totaling 214,537 units.
The fourth quarter profit amounted to 86 cents a share, nearly a nine-fold increase over last year's fouth quarter earnings of nine cents a share or $3 million.
The fiscal 1978 profit came to $1.21 a share, compared with net earnings in fiscal 1977 of $8.3 million or 27 cents a share.
The year's earnings included an extraordinary credit of $12.6 million, or 41 cents a share, attributed to tax loss and foreign tax credits. The 1977 earnings included a tax credit of 5.2 million, or 17 cents a share.
AMC Chairman and Chief Executive Officer Gerald C. Meyers said the company's healthy profits were an indication of "good progress" despite rising costs not fully recovered by price increases.
"Contributing to the company's strengthened earnings were record sales of Jeep vehicles, as well as actions taken to consolidate passenger car operations, expand Jeep production and reduce operating costs," Meyers said.
He pinpointed the consolidation of AMC's car assembly operations at Kenosha, Wisc., the conversion of its Brampton, Ontario., plant to jeep assembly; the scrapping of the poor-selling Matador line, and the decision to buy rather than build 4-cylinder engines for future cars.
The "full effect" of those actions will be felt in fiscal 1979, he said.
Meyers said AMC's international operations were "especially strong" in 1978, also contributing to the firm's profit improvement.
However, AM General Corp., an AMC subsidiary, lost $5.8 million during the fiscal year. Meyer said. He said the firm was "adversely affected by the phase-out from the standard transit bus business and the delay of certain government and international business," Meyers said.
AM General is expected to "return to a profitable operation" in 1979, he said.
"Significant progress has been made during 1978 in building the foundation for the American Motors of the future - a company with the size and resources to be a profitable member of the world automotive community," Meyers said.
International Telephone & Telegraph Corp. reported a 13 percent decline in third-quarter earnings, apparently due in part to a $26.1 million foreign-exchange loss.
But the giant conglomerate, which makes products ranging from telecommuniations equipment to bread, also announced it is boosting its quarterly dividend from 50 cents to 55 cents a share and cautiously predicted 1978 would bring it record profits.
ITT said it earned $130.6 million, or 95 cents a share, in the third quarter, on revenues of $3.5 billion. In year's third quarter, ITT earned $150.3 million, or $1.09 a share, on revenue of $3.1 billion.
In this year' third quarter, ITT said foreign-currency translation losses came to $26.1 million, or 19 cents a share, against just $4,000 in the third quarter of 1977.
The dollar's steep slide in the past year against major foreign currencies has troubled many major corporations. Exxon Corp., for instance, said last month that its third-quarter foreign currency translation losses totaled $178 million this year, up sharply from $26 million a year before.
President Carter last week announced a dollar-rescue plan involving higher domestic interest rates and central bank intervention to sop up surplus dollars on currency markets. But the dollar declined Wednesday and the day before as traders waited for the program's next step.
Because of the U.S. currency's decline, ITT President Lyman C. Hamilton Jr. was somewhat cautious about the conglomerate's outlook. While he predicted record sales and earnings for 1978, he noted the outcome is "subject only to an extreme weakening of the dollar during the remainder of the year."
In addition to its foreign currency losses, ITT said earnings from its pulp and European electronics divisions declined since last year. ITT's insurance and Sheraton Hotels divisions both turned in strong performances.
For the first nine months of 1978, ITT earned $472.2 million, or $3.45 a share, on revenues of $10.6 billion. A year ago, nine-month earnings, after accounting for ITT's sale of Avis Inc., totaled $459.1 million, or $3.39 a share. Revenues in the period came to $9.3 billion.
ITT said its creased dividend will be payable Jan. 1, 1979, to shareholders of record on Nov. 16.
Rockwell International Corp. record earnings for its fiscal year ended Sept. 30.
President Robert Anderson said 1978 net income totaled $176.6 million, or $5.02 per share, an increase of 23 percent over last year's net income of $144.1 million, or $4.18 per share.
Anderson said net income for 1978 was reduced by a provision for discontinuance of the domestic television business of $25.5 million, or 75 cents per share.
Sales from continuing operations, which do not include the provision for the television business, were $5.67 billion in 1978, compared with $5.74 billion in 1977.
Lower sales in Rockwell's aerospace business, attributed mainly to the cancellation in 1977 of the B-1 production program, were almost fully offset by improved volume in nearly all of the company's other business, Anderson said.
For the fourth quarter, net income totaled $40.5 million, or $1.14 per share, compared with net income of $41.6 million, or $1.21 per share, last year.
The 1978 quarterly figures reflect the discontinuance and operating losses of the domestic television year ago.
Resorts International Inc., which owns the East's first legal gambling casino, announced that its net earnings for July, August and September were about 17 times better than during the same period last year.
Resorts International's Casino, which opened May 26, has already taken in more than $11 million.
The company said its third-quarter earnings amounted to $23.90 million on sales and operating revenues of $95.44 million.