EIP Microwave Reports Earnings Off 52% for Year

Blaming higher research and development spending, as well as soft markets for microwave test equipment, EIP Microwave Inc. reported lower net earnings and flat revenues for its fiscal 1986, which ended Sept. 26.

The Newport Beach-based company said net earnings for the 12 months fell 52% to $362,000 from $759,000 a year earlier. Revenues fell slightly to $20.2 million from $20.3 million in 1985.

For the fiscal fourth quarter, EIP recorded an operating loss of $17,000 that was offset by $97,000 in tax benefits and an extraordinary credit of $48,000 arising from the termination of its retirement plan. Consequently, EIP had fourth-quarter net earnings of $128,000, eight times the $16,000 reported a year earlier.

Despite the small decrease in year-to-year sales for all of its fiscal 1986, EIP’s fourth-quarter revenues increased 14% to $5.5 million from $4.9 million.

The company said the lower 1986 earnings and fourth-quarter operating loss were caused by its increased research and development spending and by a reduction in small orders from customers and an increase in low-margin military sales.

Mark K. Howlett, EIP’s vice chairman, refused to say whether the company will be profitable on an operating basis during the current year.