McDonnell Douglas Net Slumps During Quarter

McDonnell Douglas Corp., which makes aircraft, space systems and missiles, posted a sharp drop in third-quarter net income to $42.6 million, or $1.05 a share, from $73.1 million, or $1.81 per share.

Third-quarter revenue rose to $3.04 billion from $2.93 billion in the same period last year.

The company said profits were hurt by large writeoffs in its combat aircraft and space systems businesses.

McDonnell Douglas said pretax earnings on its combat aircraft line were $80 million lower than last year’s period. Most of the decline was from a writeoff from lower estimates of the final price of F-18 aircraft being built for Canada.

This was necessary because inflation indexes for 1986-88, which affect the final price, are now forecast to be lower than was estimated when the contract was negotiated.

McDonnell Douglas said pretax earnings in its space systems and missiles line were $8.2 million lower in the quarter because of a writeoff of equipment no longer needed to produce pharmaceuticals in space.