Kenetech Corp reported earnings for the third quarter of $2.3 million, or six cents a share, down from earnings of $5.4 million, or 15 cents a share, a year ago. These had been boosted by the settlement of a dispute with Pacific Gas & Electric Co. Sales for the company were up 14% to $104.9 million from $90.7 million in the 1994 period.
Kenetech said the results were helped by sale of its interest in a cogeneration plant in Massachusetts and wind turbines in Texas, Spain, and the Netherlands. Profits were boosted too, it said, by sales to India and from engineering and construction work.
Kenetech's new president is Richard Saunders who has held executive positions in manufacturing, property management, and specialised vehicles. A certified public accountant, Saunders has served as a senior vice president of the international division of J.I. Case. He is not available for interviews, says Kenetech spokesman Bud Grebey.
Business columnist Herb Greenberg reported in the San Francisco Chronicle that he had heard Kenetech is trying to sell the company through Lehman Brothers. Kenetech responded by saying it does not comment on rumours. Pre-Christmas lay-offs of as much as 50% in mid December were also being rumoured. Lay-offs are common when a troubled company brings in a new president.
Although the company's stock was up 5/8 to 3 7/8 on November 9, Moody's Investors Service placed its B2 senior secured bond rating and B3 preferred stock rating under review for possible downgrading. The review was partially prompted by the possibility of the repeal of the federal production tax credit for wind power.
In other Kenetech news, it emerged, too, that the securities fraud lawsuit filed against Kenetech has been amended. Four investment banks and five company directors and the controller were added as defendants in an amended complaint filed on November 2. The financial houses named are Merrill Lynch, Morgan Stanley, JP Morgan, and Smith Barney. Apparently the amended complaint could explain why Merrill Lynch is not the company rumoured to be handling the possible company sale.