Times-Advocate from Escondido, California • 32

mmsm :1 Investors notebook Shoptalls Oak Industries won't make as much as it expected By Tamara Manjikian The Times-Advocate Rancho Bernardo-based Oak Industries announced last week that its earnings for 1982 will be lower than originally anticipated. The communicationshigh technology company said it expects a net Income of $20 million for the year, roughly $3 million less than original expectations. That equates to fully diluted earnings per share of $1.20 to $1.25, based on 16.4 million shares outstanding. Last years net income was $30.4 million. Oaks fully diluted earnings per share were $2.01 in 1981, $1.74 in 1980 and $1.23 in 1979.

The news, coupled with a recent slide in the price of Oaks stock, has left stockholders of one, two or three years holding certificates that might pay a third of their original cost, according to broker Fred Whitmore of Duane Remsnyder ft Associates in Rancho Bernardo. Oaks stocks dropped from a high of $38 last year and $32 this year to $10 Friday. The stock was trading at about $10.50 Monday, making a number of Rancho Bemardans unhappy. Many area residents, among them Whitmores clients, have invested in the company. Speaking to Wall Street analysts from New York and Los Angeles at the companys Rancho Bernardo headquarters Wednesday, Oak executives Everitt Carter and Raymond Peirce said the recession has hurt the sale of converters and decoders that Oak manufactures for cable television systems.

Orders for its 56-channel decoder, which Oak pioneered, have dropped, partly due to technical problems, and the company has had difficulty reinstating canceled orders. The devaluation of the Mexican peso also has affected the companys business, as did higher-than-budgeted costs in the third and fourth quarters for new products for the cable television industry. But Carter said Oaks over-the-air subscription television business is doing well. Oak Media Development Corp. is having an excellent year by establishing itself as a leader in developing pay-per-view events.

Oak Media recently announced that on Nov. 5 it will telecast Sophisticated Ladies, a live Broadway musical. And last month, the company telecast Star Wars to each subscriber who paid from $7 to $8 to see the blockbuster film at home. In light of its dismal earnings prospects for 1982, Oak expects to save some money by postponing its entry into the direct-broadcast-by-satellite business. The company last week canceled an agreement to lease four transponders on a Canadian satellite, a move which is expected to save Oak about $80 million to $90 million.

That money will be used to boost some of the companys other operations, particularly cable television which now is offered in five markets. Oak also cut employee salaries and instituted hiring freezes this summer in order to ensure profitability. Effective mid-August, professional employees received a 10 percent reduction in pay, while administrative and clerical workers had their salaries cut 5 percent. The pay cut followed the companys layoff of Houston's American General Venture Fund has appreciated 231 percent since 1977 by staying ahead of interest rate trends. It invariably has moved into cash before rates rose, switching back to stocks before rates plummeted.

Just before the current rally, it started buying air transport, finance, broadcasting and retail issues, anticipating good moves and prof-. its the next year or two. Largest current holdings: Metromedia, K-Mart, International Telephone and Telegraph, Holiday Inns, Ozark Air Lines, Federal National Mortgage, McDonalds, Belo. Freestanding psychiatric hospitals offer shortterm, intensive, specialized treatment for individuals with serious, but not chronic, symptoms. Theyre twice as profitable as general hospitals, and theres room for 100 percent more facilities than currently exist.

Drexel; Burnham, Lamberts recent 12-page industry report recommends four psychiatric hospital stocks (in order) Hospital Corp. of America, National Medical Enterprises, Charter Medical, Community Psychiatric. Gintel and Capitol Flow Trends employs the most pragmatic stock selection tool imaginable. It isolates companies experiencing cash-flow turnarounds because it believes they are the most reliable leading indicator of positive earnings momentum. Recent picks: American Telephone Telegraph, whose 1982 first-quarter positive cash flow was its first in decades; Cleveland Electric Illuminating, Boston Edison and Long Island Lighting, which all benefit from reduced borrowing requirements caused by lowered capital spending; A.H.

Robins and American Home Products, two drug companies whose massive research and development expenditures should soon begin paying off; and Roadway Express and XTRA, two truckers whose strong cash positions could strengthen further as consumer spending improves. One of your most important investments is one you probably never think about: your pension plan. If you dont understand it, you could have nothing to invest when you retire. A Guide to Understanding Your Pension Plan is a 32-page guide to the requirements and benefits of the most common private company and union plans. Write: Pension Guide, Dept.

1346 Connecticut N.W., Washington, D.C. 20036. Price $2. Three more votes for gold. Greens Commodity Market Comments believes the fight to quality away from the banking system may signal a stronger bull move than occurred during the 70s.

The new gold upturn, if stimulated by its insurance-of-last-resort aspects, will be better based and longer lasting. The Zweig Forecasts usually reliable gold momentum model recently flashed a buy signal, while Ruff Times prognostications are predictably unrestrained: Golds on its way to $3,000 and silver to at least $100 in the next few years. The Wild Animal Park had a 24 percent increase in visitors compared with last summer. roughly 650 employees out of a total workforce of about 13,000. More than 100 of those workers were employed at Oaks Carlsbad manufacturing facility, where decoders are assembled.

Tourism down at big attractions, but Wild Animal Park does well Although bad weather, the peso devaluation and the recession meant fewer visitors to most of the countys tourist attractions this summer, the Wild Animal Park had a 24 percent increase in visitors compared with the previous year. Results of the San Diego Convention and Visitors Bureau's summer Visitor Profile Study show that the average San Diego visitor this summer was richer than in the past, spent more per day while here, but stayed only an average of five and a half nights instead of seven. This summer, more than two-thirds of the travelers to San Diego County had family incomes of $30,000 or more, compared to just 49 percent last summer. Harold Starkey, bureau president, said the percentage of people staying in hotels this summer declined, while the number who chose motels rose sharply. "This is a very price-conscious market, he noted.

"We see a recession psychology reflected in our visitors. They are spending more on lodging because hotel rates are up. But they are not eating out in restaurants as much or attending as many While most of the tourism indicators such as hotel occupancy, Mexican visitors and convention attendance were down, the study shows that last summer visitor spending increased 6.6 percent. About the same number of visitors 5.7 million people traveled tt San Diego County this summer and last, the bureau reported, and airport arrivals jumped 14 percent. The increase in business at Lindbergh Field is somewhat distorted by the fact that last summer saw the air controllers strike, which caused a sharp decline in air travel.

For the month of August, normally the peak month for tourism, total visitors to the county dropped 7.6 percent below last years 2 million tourists in August, the bureau reported. Visitor spending rose just 3 percent to $158 million in August because tourists shortened their stays and brought smaller family groups, an outcome of the recession, Starkey said. We also observed some clear indications of the effects of the recession in the areas our visitors came from this summer, he said. There were increased numbers from the Sun Belt states that have been less impacted by the recession. We saw more tourists from Florida, Georgia, Texas and Arizona.

Starkey noted declines in tourists from Michigan, Ohio and Wisconsin. The dollars strength might have canceled vacation plans for many Canadian and Mexican visitors, he said, reporting a nationwide decline in tourists from those countries. Brendan Boyd compiles Investor's Notebook from opinions by the world's leading financial advisers. The column does not endorse specific investments, and no endorsement is implied or should be inferred. For further information, contact the individual firms cited.

The Bottom Line From T-A Wire Services NWEAMN HIGHEST MATES SHMT TEMM INVESTMENTS AT EE (GAMIN THMIET Group for $60 million. Dow plans to sell Dow Chemical Korea which it owns outright, and a half interest in Korea Pacific Chemical which it owns with Korean Pacific Chemical Holding Co. International Harvester Co. is trying to drum up support-among its suppliers for $50 million in concessions that are a key provision of its $4.2 billion debt restructuring plan. The troubled farm and heavy equipment manufacturer, facing a Friday deadline for ratification of the plan, is asking suppliers for price cuts, extended payment terms and inventory concessions.

American Seating president says the companys board approved a proposal for Fuqua Industries Inc. to acquire American Seating through an exchange of stock. Fuqua, which already owns 39.8 percent of American Seatings common shares, offered 1.1 shares of its common stock for each share of American Seating under the tax-free proposal. The U.S. Environmental Protection Agency says it will let General Motors Corp.

continue replacing faulty catalytic converters on some 735,000 1981-model cars with another type that does not meet federal pollution standards. Midway Airlines says Neal F. Meehan, former president and chief executive of New York Air, has been named president and chief operating officer of Chicago-based Midway. Meehan, 41, replaces Gordon Linkon, who resigned in August. A federal pension agency is considering Tang Industries Inc.s request to limit its liability for McLouths unfinanced pension obligations.

The Pension Benefit Guaranty Corp. is scheduled to take up the matter Thursday in Washington. The Supreme Court agreed today to decide whether retired male and female workers who put in equivalent service can receive unequal retirement benefits. The justices said they will review a ruling that unequal payments violate a 1964 federal law banning sex discrimination in employment. The Supreme Court, sounding a sour note for the nations jukebox industry, today refused to disturb a music copyright fee now imposed on each commercially operated record machine.

By 1984, jukebox operators will have to pay a $50-per-machine flat fee each year to agents for the music copyright holders. The Supreme Court today protected the New Jersey Monthly magazine from being forced to disclose key information in two libel suits filed against it. The court, without comment, let stand rulings that the disclosure is barred by a New Jersey shield law protecting news media sources and confidential information. The Supreme Court today refused to order an oil industry newsletter to reveal the names of its news sources to five states suing 18 major oil companies. The court, without comment, let stand a ruling that at least for now allows Platts Oilgram Price Report to withhold the information.

The Supreme Court today refused to let people sue the Veterans Administration for failing to help them avoid foreclosure on their VA-assisted mortgage. The justices, without comment, left intact a ruling in a California case that no such right to sue exists. Nation The government says 82 percent of the nations savings and loan associations lost a combined record $3.3 billion in the first half of this year, more than double the losses posted in the first six months of 1981. This years first-half losses also were ahead of the $3.1 billion reported in the last six months of 1981, the Federal Home Loan Bank Board reported Monday. Overall losses for 1981 were $4.6 billion.

The institutions earned money in 1980. The oil industry is gearing up this week for the sale of 1.8 million acres of leases in an icy stretch of water above Alaska named Diapir Field, which may hold the biggest reserves of oil and gas found in the United States in 14 years. The sale could bring in a record $3 billion in bids. Steel production rose to 1.183 million tons in the week ended Oct. 9, an increase of 0.3 percent from the previous weeks 1.180 million tons, the American Iron and Steel Institute reports.

The industrys production amounted to 40.0 percent of capacity during the week, compared with 39.9 percent in the previous week. Wendy's International after almost three years of testing, says it is going national with its Sisters Chicken and Biscuits restaurants. Wendys, headquartered in this Columbus suburb, already operates a national chain of franchise hamburger restaurants. Although two transactions helped Westing-house Electric Corp.s third-quarter net income climb 8.7 percent on a slim 1.8 percent sales gain, the company says profit from operations fell from a year earlier. Westinghouse said divisions reporting lower operating profits in the quarter included its Industry Products which makes electronic components, motors and insulating materials, and its broadcasting-cable unit.

Its Public Systems maker of defense systems, beverages and a broad range of other products, posted higher operating profit. Bargain hunters grabbed up slippers for $1 in Detroit and started Christmas shopping in California as the nations troubled retailers used traditional Columbus Day sales to draw customers into their stores. Some department stores reported that business Monday was more brisk than normal for Columbus Day. Others said sales were better than in recent months, but average for the day. The postal clerks union, determined to fight fire with fire, is launching a television advertising campaign designed to counter private competition to the Postal Service.

With the blessing of the U.S. Postal Service management, the American Postal Workers Union will beging its $2.7 million image-building campaign next week in 26 cities. Seven United Auto Workers union locals were voting today on a tentative contract with Chrysler but the pact is expected to be rejected. Among the 24 locals out of about 50 to vote so far, workers have rejected the pact by a 2-1 margin, the union said Monday. The unofficial tally showed 19,356 votes, or 68.2 percent of the ballots cast, against ratification and 9,029 in favor of it.

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