McDonnell Profit Falls; Information Systems Losses Cited

McDonnell Douglas Corp. said Thursday that its third-quarter earnings declined from a year ago because of a substantial increase in losses posted by its information systems unit.

Net earnings were $73.1 million, compared to $88.4 million last year, and sales totaled $2.89 billion, compared to $2.46 billion a year earlier, the firm said.

Information systems losses expanded over last year as revenue fell short of expectations. The company cited unfavorable conditions throughout the computer and computer services industries. The company said it has taken significant steps to improve the fourth-quarter financial performance of the information systems unit.

Third-quarter earnings this year also were hurt by a higher effective tax rate, which stemmed from a reduction in tax benefits related to export sales, and by higher interest costs associated with heavier borrowing, the company said.

Although earnings declined over a year ago, third-quarter sales were higher in all product lines.

Sales for the first nine months of this year rose to $8.39 billion from $7.04 billion, while nine-month earnings increased to $250.9 million from $233.6 million.

This year’s nine-month sales turned out better than last year’s partly because of two events in early 1984. Sales last year suffered from an interruption of transport aircraft deliveries as a result of a labor dispute in the first quarter. Last year’s first-quarter results also did not include results from Tymshare Inc., which was acquired on March 30, l984.