Rocketdyne purchase puts GenCorp in red for fourth quarter

Published: Friday, Feb. 7, 2014 - 9:52 am

GenCorp Inc. reported a fourth-quarter loss of $3.7 million Friday, as the costs of digesting Rocketdyne offset big increases in revenue and operating income.

In its first full quarter since completing the Rocketdyne takeover, the Rancho Cordova rocket-engine manufacturer’s revenue soared to $485.3 million, up from $298.2 million a year earlier. Rocketdyne alone generated $182.6 million in sales. The $550 million acquisition increased GenCorp’s engine and aerospace business, now called Aerojet Rocketdyne, by 60 percent.

“We are very pleased with our core operating results,” said Scott Seymour, GenCorp’s president and chief executive, in a news release. GenCorp said its operating income in the quarter rose to $14.1 million from $10 million.

GenCorp also announced its board had authorized the company to buy back up to $75 million in stock from the public. GenCorp’s shares rose 94 cents Friday to close at $17.91 on the New York Stock Exchange.

The twin announcements came two days after GenCorp said it was cutting 225 jobs nationwide to eliminate overlapping jobs from the blending of Rocketdyne with Aerojet. The layoffs represent 5 percent of GenCorp’s total workforce.

Company spokesman Glenn Mahone said the layoffs aren’t related to the earnings results or the stock buyback.

“When we went through this acquisition, we said all along there would be redundancies,” Mahone said. “There are employees who are doing the very same things and we don’t need them.” The company expects to spend $15.7 million on severance and other costs connected to the layoffs.

Even though it completed the Rocketdyne takeover in June, GenCorp still incurred millions of dollars in acquisition costs in the fourth quarter. The result was a loss of $3.7 million, or 6 cents a share. That compared with a profit of $2.8 million, or 5 cents a share, a year earlier.

For the full fiscal year, which ended Nov. 30, the company earned $167.9 million, or $2.76 a share. In 2012, GenCorp lost $2.6 million, or 4 cents a share. The surge in profits was mainly due to a tax-related issue.

Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.

Read more articles by Dale Kasler

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