Hercules Inc. reported 1988 net income of $120.4 million, equal to $2.55 per share, down from $820.7 million, $14.74 per share, in 1987. Sales for 1988 were $2.802 billion, compared with $2.693 billion the year before.
For fourth quarter 1988, net income was $6.5 million, or 15 cents per share, after nonrecurring charges of $16.9 million, or 35 cents per share, resulting in operating earnings of $23.4 million, or 50 cents per share. This compares with 1987 fourth quarter net income of $38 million, or 73 cents per share, and operating profits of $48.4 million, or 94 cents per share.Sales for fourth quarter 1988 were $749 million, compared with $678 million in fourth quarter 1987.
Both the 1988 year-end and fourth quarter results were affected by a $16.9 million, or 35 cents per share, charge to earnings resulting from a planned staff reduction, which is being accomplished by a Limited Retirement Incentive Program to salaried employees in the United States. The year-end results were also affected by a third quarter nonrecurring loss of $5.4 million, or 11 cents per share, from the disposal of businesses.
"As we have noted throughout the year, a number of unfavorable conditions, most of which have been resolved, contributed to the disappointing financial results in 1988," said Davis S. Hollingsworth, chairman and chief executive. "Throughout the year, aerospace profitability continued to be affected by the relatively low profit margin development phase of several major missile contracts, and in engineered polymers, fibers and film profits were significantly impacted by high raw material costs," said Hollingsworth.
"During the past three years, Hercules has invested over $1 billion in research and development, new production facilities and working capital, and at the same time we have been making every effort to be more efficient in our operations.
"This year will mark the beginning of the payback from these substantial investments and efficiencies, and the outlook for Hercules profitability in 1989 is significantly improved over last year's results."