Zenith Electronics Corp. posted a small profit in the fourth quarter because of a one-time gain and a tax benefit, but the Glenview company suffered a $7.7 million net loss for all of 1985.
Zenith blamed the results on continuing price competition in consumer electronics products, which has been even more aggressive for videocassette recorders than for color television sets, and sharply lower sales of computer- power supplies and cable TV products.
Zenith`s personal computers continued to post a strong performance for the fourth quarter and the full year.
At a press conference Friday, Jerry K. Pearlman, Zenith chairman and chief executive, disclosed that in late 1985 Zenith shifted a small portion of its 19-inch TV set final assembly to a plant in Mexico from Springfield, Mo. The move resulted in the layoffs of about 250 workers at the Missouri plant.
He said Zenith has ”no current plans” to shift more final assembly to Mexico.
Pearlman declined to project Zenith results for 1986, except to say that they should be better than in 1985.
He did say that the first-half of this year should be ”difficult,”
because of continuing price erosion in consumer electronics and anticipated delays in fulfilling heavy order backlogs, especially on larger-screen and higher-priced TV sets and on computers.
In the fourth quarter, Zenith had net income of $3.6 million, or 16 cents a share, down 68 percent from $11.3 million, or 51 cents a share, in the year- earlier period. Excluding one-time gains and charges and a tax credit, Zenith`s pretax operating results were break-even.
Quarterly sales rose slightly to $484 million from $483.6 million.
The 1985 net loss was in contrast to net income of $63.6 million, or $2.88 a share, in 1984. The 1984 results included a tax benefit of $10.4 million, or 47 cents a share.
Sales fell 5 percent, to $1.62 billion, from $1.72 billion.
Asked about the proposed merger of two consumer electronics competitors, General Electric Co. and RCA Corp., Pearlman said Zenith won`t take any steps to oppose the combination.
He said GE`s acquisition of RCA, at least during the consolidation phase, ”will probably result in more price stability” in color TVs. Over the longer term, he said, GE should be able to spread its fixed costs over a larger volume and thus enjoy a cost advantage over Zenith. Pearlman said such a cost advantage wouldn`t necessarily lead to more aggressive TV set pricing by GE.
