Two of Washington's biggest businesses -- the Federal National Mortgage Association and MCI Communications Inc. -- yesterday reported their financial performance continued to deteriorate in the third quarter of the year.
MCI's profits plunged to $7 million (3 cents a share) from $51.5 million (22 cents), and Fannie Mae posted a loss of $43.1 million, compared with a profit of $24.8 million in the same period a year ago.
Higher interest rates were blamed for the loss at Fannie Mae, the federally chartered firm that runs the nation's secondary mortgage market. Fannie Mae said it paid out $56 million more in interest on money it borrowed than it took in on loans it made. In addition, the company set aside $35 million as a reserve against losses on mortgages.
The loss came after six profitable quarters for Fannie Mae, whose fortunes are highly sensitive to interest rates. After strong earnings in the first quarter of the year, Fannie Mae posted a slim $2.4 million profit in the second quarter. As a result of the third-quarter write-offs, Fannie Mae showed a loss of $26.2 million for the first nine months of the year, compared with a $61.9 million profit in the same period a year ago.
MCI blamed its declining profits on higher than expected fees for access to Bell System lines and on competition in the long-distance phone business, which required MCI to give volume discounts and eliminate monthly customer fees.
MCI's revenue grew to $478 million from $396 million for the quarter and increased to $963 million from $760 million for the first half of the company's fiscal year. First-half profits totaled $40 million (17 cents), compared with $106 million (45 cents) in the first half of the previous fiscal year.
Sales and earnings grew by 70 percent during the last fiscal year at Penril Corp., the diversified Rockville electronics manufacturer. Profits climbed to $2.47 million ($1.18) from $1.45 million (72 cents) for the year ended July 31, and fourth-quarter net was up almost 80 percent to $734,000 (34 cents) from $410,000 (20 cents).
Annual revenue grew to $65.7 million from $38.7 million, aided by the two biggest acquisitions in Penril's history -- the purchase of Triplett Electrical Instrument Corp. and Concord Systems Inc., a high fidelity audio gear maker.
Maryland National Corp., the holding company that owns Maryland National Bank, reported a 26 percent jump in earnings for the first nine months of the year and a 41 percent improvement in third-quarter profits.
The big Maryland bank earned $35.8 million ($4.16) for the nine months, up from $28.4 million ($3.31) and recorded a profit of $12.5 million ($1.45) for the third quarter, up from $8.9 million ($1.03) in the same period a year ago.
The Ryland Group Inc. reported its third-quarter sales fell about 5 percent to $113.1 million from $118.9 million and earnings dropped 46 percent to $2.6 million (42 cents) from $4.9 million (78 cents). For the first nine months of the year the Columbia-based homebuilder earned $5.4 million ($1.12), down 45 percent from $12 million ($1.94), and sales were off 2 percent to $293.3 million from $299.1 million.
O'Sullivan Corp. of Winchester reported third-quarter profits grew to $2.7 million (63 cents) from $2.3 million (53 cents) and revenue for the quarter climbed to $31.7 million from $27.4 million. For the first nine months, O'Sullivan earned $8.4 million ($1.95) on revenue of $98 million, up from earnings of $6.2 million ($1.42) on revenue of $79 million in the same period a year ago.
DC National Bancorp., parent of DC National Bank, said its third-quarter earnings grew 66 percent to $864,000 (99 cents) from $521,000 (80 cents) in the same period a year ago. For the first nine months, DC National's profits increased 52 percent to $3.4 million ($3.11) from $1.6 million ($2.55).
F&M National Corp., the Winchester holding company for four Virginia banks, reported third-quarter net grew to $781,000 (42 cents) from $639,000 (34 cents) and said earnings for the year to date were up to $2.1 million ($1.14) from $2 milion ($1.10).
Computer Data Systems Inc., a Rockville computer services firm, said earnings for the first quarter of its fiscal year grew to $823,000 (27 cents) from $738,000 (24 cents) and revenues increased to $15 million from $12.8 million.