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Tektronix beats estimates, plans to split into two companies

    Tektronix, Inc. (NYSE: TEK) reported fourth quarter earnings of $24.9 million, or 53 cents a share, beating First Call estimates by a penny. Tektronix will also spin off its measurement unit and color printing and imaging division into publicly traded companies, the company announced Thursday.

    As independent companies, the measurement business division, and color printing and imaging division will be able focus on their own operations and marketing. The two fundamentally separate businesses currently compete for management focus and investment dollars, according to a company press release. Tektronix also announced it intends to sell or find a strategic alliance for its video and networking division.

    The new measurement company will retain the "Tektronix" name. The color printing and imaging company has not been named. Tektronix said it is considering an initial public offering (IPO) for about 15 percent of the new color printing and imaging company before the end of the fiscal year. The remaining shares would be distributed, on a tax-free basis, to Tektronix shareholders after the offering.

    This quarter's earnings of $24.9 million were a drop from earnings of $42.5 million, or 83 cents a share in the same quarter last year. For the year, earnings before non-recurring charges were $30.8 million, or 64 cents per share, compared with $135.2 million, or $2.63 per share in 1998. Including the charges, the company had a net loss of $51.2 million, or $1.07 per share for 1999, compared with earnings of $82.3 million, or $1.60 per share last year.

    Net sales for the quarter were also lower, at $541.3 million compared with $557.9 million for the fourth quarter last year. Yearly sales were $1.9 billion compared with $2.1 billion in fiscal 1998.

    "Though we realized a modest decline in overall performance over the last year, we saw a steady improvement in sales throughout the year, with a fourth quarter increase of 15 percent over the third quarter," said CEO and chairman Jerry Meyer, in a statement. The rise was attributed to increasing printer sales and improvement in Asia.

    The breakdown in sales for the soon to be separate divisions shows that though all three declined since the same quarter last year, sales have increased since the third quarter. Color printing sales for the quarter were $213.1 million, up from $203.7 million in last year's fourth quarter fiscal 1998. While sales were down in the measurement business to $230.6 million from $247.3 million in the same period last year, and orders decreased 3 percent comparatively, the division realized a 17 percent increase from the third quarter. Sales were $97.6 million in the video and networking division compared with $106.9 million in the fourth quarter of 1998.

    Tektronix competes with Snap On Inc. (NYSE: SNA) and Teradyne Inc. (NYSE: TER). Shares in the Wilsonville, Oregon-based company were steady at 26 9/16 in morning trading.