The Los Angeles Times from Los Angeles, California • 64

COWTT UIIS TOr Ufi 111 1 IF- t) 1 JWIMOfi'M I 111 11 f1 A a a in racmc ie Increase Would Be Less Than a TMrd of Firm's Proposal Litf on Reports Sharp Drop in Net Income for 2nd Quarter, Half BY JOHN GETZE Tlm Stiff Wrlttr A substantial decline in net income for both the three and six month periods ended Jan. 31 was reported Wednesday by Litton Industries Beverly Hills. The widely diversified firm said higher costs, reduced sales in some divisions and increased interest expenses accounted for the drop. Net earnings for the three months ended 31 fell to $11,922,000 or 31 cents a share, compared with, $19,160,000 or 51 cents a share for the same period last year. Sales for the firm's second quarter rose to $599,612,000 from $594,419,000 a year First Half Decline For the first half of Litton's fiscal year, earnings declined to $23,580,000 or 61 cents a share, against Or $1.01 a share for the first half a year ago.

Sales totaled vs. $1,142,956,000 last year. Per share figures are fully diluted, with the year-earlier results adjusted for the 2Vi stock dividend paid In November, 1970. In a prepared statement, the manufacturer of such diverse items as electronic systems, business machines and ships, said "price and cost pressures continued to affect earnings in the Industrial Systems and Equipment Group." Litton noted that reduced demand for machine tools, material handling equipment, industrial motors, and components accounted for a 25 cent per share difference in the six months earnings results. Recrion to Sell ROLLS WITH ROLLS Daniel J.

Haughton, chairman of Lockheed Aircraft stands beside the Rolls-Royce which met him ota London airport. Haughton said he was in Britain to renegotiate the RB-211 jet engine contract, but Lockheed's chief officer said he didn come with Lbckheed's Best Bet Is to Stick With Rolls, Haughton Declares BY RICHARD RESTON Tlmf Stiff WrtUr but Buyers, Funding by PAUL E. STEIGER '4; TinMt Staff Writ Recrion the Las Vegas casi- money for the purchase was being no company formerly known as Par- raised with the assistance of a Chica-vin-Dohrmann Wednesday an- go brokerage house. He declined io nounced an agreement to sell one of name the securities firm, saying that its three hotelcasinos-rthe jnoney? this; Information should come from losing Aladdin-f or $12 million plus -Recrion, which he said had helped THURSDAY, FEB. National: Rep.

Goldwatcr urgei rtvttw ef two defense contracts with Rolls-Royce. Congressman Barry Goldwater Jr. (R-Cal.) wrote" to Dep. Defense Secretary David Packard, to F. Edward of the House Armed Services Committee, and George HiMahon chairman of the House -Appropriations Committee.

He urged of the. Harrier vertical takeoff plane and the A-7 tactical fighter program, both powered by Rolls-Royce engines." After Rolls-Royce's failure to supply engines for the Lockheed L-1011 airliner, Gold-water it's questionable whether th Defense Department can rely on the British firm for the other Y'l-- Stoni urged expanded U.S. trade witfi Russia and Eastern Europe. Commerce Secretary Maurice H. Stans told the House-Senate joint economic committee that the 1970 U.S.

trade, surplus of billion would diminish to $2 billion in. 1971. Stans said the United States now ac-. counts for only 4 of trade, however, and said it could do better. Nixon's advisers asked for a bif boost in the notional debt limit.

White House fiscal officers pressed Congress for a $40-billion hoist to the national debt ceiling, to $435 the biggest single increase since World War II. They said another raise probably will be needed before the end of the fiscal year June 30, 1972. They also asked for repeal of the 4 14 limit on interest the Treasury may pay on long-term federal bonds. Treasury Secretary John B. Connally ac-, knowledged that predictions of a deficit of only $1.3 billion, on which the present debt ceiling was based, "turned out to be very wide of the rrfarlc' Ihe federal court took the VfliiW merger question under advisement.

Judge Frank J. Pattisti in Cleve-' land took under advisement a Justice Department request for an injunction to block a proposed merger of White Consolidated Industries and WTiiteu both of Cleveland. Attorneys for the two companies, whose shareholders ap- proved the merger, made their final arguments Wednesday. The Justice Department asked for preliminary injunction after opposing the merger on antitrust grounds. California? emorex said the SEC is reviewing 1970 accounting procedures.

The financial reDort for 1970 sales Ind earnings of Memorex inta Plara ha heen before the Se curities it Exchange Commission for i week or so," the company said, emorex was caught in an account-Ag controversy after, it les to an affiliate, Independent in its nine-month arnings, even though ILC hadn't en capitalized and couldn't pay or the equipment it acquired. Me-norex later revised its figures to eliminate the sales to ILC. and last De cember the firm completed $142.7 hiillion in financing for its affiliate. Pacific Lighting will need about 175 million in new financing iPaul A. Miller, president of the .41 ,03 Angeies-oasea company, una rw York Security analvsts the mo- Key will be needed during the next pur years for necessary expansion, hr.ludinz $75 million to buv more natural gas for Southern California.

The financing is planned as debt ssues. Miller estimated the compa- y's- earnings ia1 snouia oe bout 25 higher than 1970 net of 12.03 per common share. He also aid Pacific Lighting's utility com- ames tentatively plan to seek lugh-r rates in the second quarter of (Union Oil asked to join a volcanic power project in the Philippines. I The Los Angeles-based oil company applied to join the Philippine government's National Power Corp. developing the country's volcanic power resources.

The presidential nalare in Manila said Union oil last year explored the Tiwl project in Al- bay Province, southeast of Manila, which consists of a. sir-inch rasn- hole drilled 641 feet into the earth. A great quantity of steam is rising irom underground heated rock to the surface through the Tiwi pipe. 4, i Part of tht Dart glass container plant at Saugus is back at work. Dart Industries, Los Angeles, said 'tha first of three, furnaces at the Saugus plant of its Thatcher Glass 12 Piiiii 2 division, which was damaged in the Feb.

9 earthquake, is back' in operation ahead of expectations. The oth- er two furnaces should be back in production by early April, Dart said. Hw'wcl rtw fswsty of six largo-scale computers. The new line, for business and scientific applications, will be priced between $1 million and $4.5 million or may be rented for between and $162,500 a month. Deliveries of some models will begin in July.

Sales of Honeywell's computer sub- sidiary last year rose to $861 million, the company said, 13 ahead of the combined revenues of the Honeywell and General Electric Co. compu- ter operations in 1969 before they merged. "'i Men at the Top Paul W. Fassnacht retired from tha Technicolor president's post. Fassnacht, 65, had been president and chief executive officer since 1966 and a Technicolor employe for 41, years.

William E. McKenna, board chairman who took over last -June after a proxy battle, said the 'offices of president and chief executive will not immediately be filled. McKenpa said the board appreciated Fassnacht's "unstinting co-operation" in the reorganization after the change in management last year. Briefly Told Kaiser Aluminum Chemical first quarter earnings will be "well below the year-ago level of 70 cents a share, but the 1971 total should be-, higher than the $2.50 a share earned In 1970, the firm told securities Sears Roebuck Acceptance and CIT Financial Corp. trimmed their commercial paper rates to 3Ts for short-term maturities starting at 30 days, as other companies conti- nued cutting down to the 4 level Brtniff Airways flew 363.1 million revenue passenger miles in January, down from 372.6 million a year earlier Tipperary Land Ex ploration reported positive results from pilot tests of bauxite sample from the Aurukun project in Queensland, Australia Gulf States.

Land St Industries failed1- to get enough votes to carry out its merger with Carhberf Financial Corp Occidental Life of California had rec-5 ord 1970 life insurance sales of $3.8 billion, up 6 from 1969 i Union'' Oil completed a step-out well near the Attaka unit discovery offshore East Kalimantan, Indonesia Mohawk Airlines passed the 30-day grace period without paying interest on $8 million in convertible subordinated debentures. so 80 .70 C3 43 30 23 30 -23 26 24 22 20 18 16 14 12 10 8 MIMKtMtM 18 115 122 129 25 212 219 WEEKS ENDING YESTERDAY A NEW YORK Tht Dow Jon.s 30 industrial stock overage closed at 887.87, down 2.1 9. High during the day was 894.78; the low, 879.38. The Amex index closed off 0.07. OVER-THE-COUNTER The National Quotation Bureau index of 35 industrial stocks closed at 415.44, up 1.45.

The 1970-71 high of 432.07 was set Jan. 14, The 1970- 71 low of 271.71 was set May 27. LONDON The Financial Times index of 30 industrial stocks closed ot 335.7, up 3.3. The 1970-71 high of 423.4 was set Jan. 14..

The 1970-71 bw ef 315.6 was set June 15. IS, 1971 I "i J-1 I BY ALEXANDER AUERBACH Tlimi lUft Wrlfw -2 The staff of the California'. Public Utilities- Commission "Wednesday1 proposed a $62.8 million? annual increase in rates for Pacific Telephone less than a third of the $195 million the company had requested. 5 The, staff said the recommended increase would give Pacific Tele-; phone a 7.64 return on, invest- ment, compared to its current 6.77 return. The company had said it would like a rate of return of at least 8.5, but on a different method of computing rate base.

1 The hearings on the rate request are recessed until next week when the staff will be cross-examined on its recommendation. The staff also suggested that the "telephone company sharply ihcreasa i its rates for computer data transmissions over phone lines, and keep its low "lifeline" rates for the elderly and poor. 1 Computer Rate Proposed r. Pacific Telephone should establish a special time rate for calls of extremely long duration which are non-voice transmissions," the staff said, to cover all computer linkups. The fast-increasing use of phone lines by computers has "imposed dif- ficult service problems" and "over- loaded even to point of breakdown" phone networks which werfi not designed for such heavy use, tha staff report 1 The staff also said the "lifeline" service of $2.25 with a 30 message units per month allowance should be wised nominally to not the $2.90 minus the message units the company had asked.

The rates suggested by the staff would raise residential private line Please Turn to Page 13, Col. 8 Aladdin Hotel arranffe for this toart of the deal. Reached at Recrion's Stardust hotel-casino (it also owns the Fremont in downtown Las Norris Goldman, president of said that, he knew nothingl about the brokerage house or any role it might1 plan in the deal. Please Turn to Page 19, Col. 1 Expect Early Go-Ahead to Assist Earthquake Victims BY JOHN F.

LAWRENCE Timw Finandit Iditw Savings and loan associations here expect new directives from state and federal regulators by the end of the week permitting liberal loan ar-. rangements with victims of the earthquake. This would be in addition to. low-interest loans available from the Small Business Adminis-tration. leaders say they are looking at quake damage situations on a case-bycase basis to determine what assistance they can, give to homeowners: So; far, they report few instances where homeowners simply abandoning their properties to their mortgage holder Where homeowners have, enough equity in their property to rebuild, typical arrangements are for increased loans at preferred interest rates.

Home -instance, says that', in sdme -cases; Where an owner is paying, an interest rate be- low today's rate, it will permit the owner to increase the size of his mortgage and still retain the lower rate. It charges no loan fees in such cases. Loan Extension Glendale Federal, in cases where it's practical, will extend a mortgage up to as much as 110 of the value of the house. Normally it will loan no more than 80 of the value. A sampling of real estate agencies -indicates that while home sales naturally have slowed in the earth- quake areas, some sales are continu-r ing to take place.

Moreover, sales activity already has begun to rebound from last week's level 'Sunday we sold a home right in the middle of the area," says Don Olson of Forest E. Olson a Van Nuys real estate broker. "The people said if it withstood this, itll stand anything. Uncertain LONDON Daniel J. Haughton, chairman of Lockheed Aircraft arrived here Wednesday and expressed the opinion that the best hope for his company's commercial jet airliner is to find a way to keep the Rolls-Royce RB-211 engine program going.

He made clear that his talks with. Mild Profit Taking Sets In. as Trading SIovvs; Dov Off 2.19 NEW YORK Trading; slackened somewhat Wednesday from its recent dizzying pace as the stock market rebuffed a midsession firming tr end to end the session modestly lower. At the closing bell the Dow Jones average of 30 industrial stocks slipped 2.19 to 887.87. Earlier it had been off more than 6 points as the New York Stock, Exchange tape ran late at times.

Big Board Volume was 18.72 million shares, down from Tuesday's turnover of 21.35 million shares. Analysts said the market was governed by mild, profit taking which was to be expected after recent sharp gains. The market's action Wednesday is suggestive of the development a minor pullback in the near future," said a research director at a New York brokerage. The market's uptrend Is still intact, and investors are resisting any severe profit taking, he noted. But he added that the rotational interest the market was showing "in broadening its interest into new Please Turn to Page 13, Col.

2 my pockets tull ot money. IM WlrMhntn Rolls-Royce executives must enable him to make a firm proposal by Feb. 26 to Lockheed's airline customers. He said he had promised the airlines a decision by that date and added Lockheed is talking with other engine manufacturers. Haughton told an airport press conference that he hoped to be able to guarantee the airlines "a viable program for both the airframe and engines.

He added the airlines cannot continue with the Lockheed air- plane without "unqualified assurances." v. The chairman's attempt to salvage the RB-211 came as the British government acquired final authority to nationalize Rolls-Royce, which went Into receivership- two. "go Other Points Haughton made these other points: Direct U.S. government financial assistance is highly unlikely. Such a move would require legislation and, even if successful, this would take time.

Lockheed is prepared to renegotiate certain aspects of its 1968 contract with Rolls-Royce, but that does not necessarily mean that Lockheed will shoulder heavy overrun costs. "I do not want you to imply that I came here with my pockets full of money," Haughton cautioned reporters. He said he wants an engine fully competitive in both cost and performance. His tone was a mixture of hope and confidence. From the beginning of this British government offi-' cials have taken a pessimistic view of frantic efforts to save the program.

They believe a satisfactory solution, is at best a "long shot." Haughton will confer with Lockheed technical. and financial repre sentatives here, as well as Rolls-" Royce officials and Lord Carrington, Please Turn to Page 19, Col. 1 115 WHOLESALE PRICES 110 1867108 105 100 95 I 1 1 1 i I 1 1 I .1968 1969 i assumption of a $4.5 million debt. If completed, the planned transaction would rid Recrion of an operation that suffered a $1,4 million pretax loss in the nine months ended last Sept 30. 7 It would also earn Recrion a substantial profit over the 70,125 shares of its stock (then worth about $2.6 million) which it paid for the Aladdin in 1968.

However, the announcement, of the deal left some questions unanswered. Named as the representative of the purchasers was' Walter Gardner, a Las Vegas businessman and former executive at the Horseshoe Club, a downtown casino owned by Benny Binion, longtime Texas and Nevada gambling figure. Gardner couldn't be reached, but his attorney, George Marshall of Las said represented himself and six other investors from around the country. Marshall said that the other six couldn't be named yet because they hadnt yet had a chance to examine the final terms of the deal negotiated by Gardner. Marshall also said that some of the ITtTf 1 MT1T kiiiMitiiii illiaiUVIll 1971 1978 UP 0.5 DURING JANUARY Wholesale Price Jump Exceeds Forecast WASHINGTON (DJ) January wholesale prices rose a seasonally adjusted 0.5, the Labor Department said Wednesday or at an even more rapid pace than the 0.4 advance indicated in the preliminary report Even more discouraging to the Nixon Administration analysts was that all the upward revision was in the key industrial commodities prices.

Wholesale, industrial commodity prices rose 0.3 in up from the 0.1 rise indicated in the preliminary report. The increase to 111.8 of the 1967 average is the sharpest advance since the adjusted 0.5 rise last July and the index now stands 2.3 above a year earlier. On an unadjusted basis, wholesale prices, rose 0.7 In January the steepest increase since January, 1970, The preliminary report said January wholesale prices rose ah unad- justed 8.6. Industrial commodity prices rose an unadjusted 0.4, the Labor Department said, instead Of the rise indicated, in the pre-. liminary report INFLATION UPTURN In a sharp setback for the Nixon Administration's inflation i fighters, wholesale -prices-rose Q.5 in January, according to revised statistics from Labor Department.

Times cbari by BasseU Arat mltb.