McDonnell Douglas Net Rises 10%

McDonnell Douglas reported that its profits increased 10.5% to $86.1 million on strong aerospace sales in the second quarter. The company posted sales of $2.8 billion in the quarter, a 10.5% increase from $2.54 billion a year earlier.

The St. Louis-based firm said its profits would have been higher except for increased losses in its information systems business because of lower than expected sales volumes and lower tax benefits on foreign sales.

Earnings also were hurt by the suspension of overhead payments to the firm’s Culver City-based Hughes Helicopters unit, which is under Pentagon scrutiny for its accounting practices and billing, a spokesman said. The Army started withholding about $1 million daily from the firm on May 16, which resulted in extra interest expenses of about $600,000 over the past 60 days.

Separately, McDonnell also announced that its Douglas Aircraft unit in Long Beach sold three more DC-10 cargo jets to Federal Express, a key order that will extend production of the wide-body airliner to the second quarter of 1988.

Douglas sold six DC-10 cargo models to Federal Express last May and is producing 60 of the aircraft, configured as a tanker, for the Air Force. The firm did not disclose the value of the Federal Express sale, but a typical DC-10 passenger model sells for about $65 million.