Earnings : National Education Reports 3rd-Quarter Loss of $6 Million

IRVINE — As it had warned two weeks ago, National Education Corp. on Friday reported a loss of $6.5 million for the third quarter, contrasted with net income of $13 million in the same quarter a year ago.

Revenue for the three-month period fell 13.5% to $94.2 million from $108.9 million in the third quarter of 1988.

The sizable loss did not affect National Education’s fortunes on Wall Street. In fact, the company’s common stock gained 12 1/2 cents a share for the day to close at $7.62 1/2 on the New York Stock Exchange, up 13%--or 87 1/2-cents--for the week.

The stock has been recovering gradually since National Education announced Oct. 5 that it expected its third-quarter loss to exceed $6 million.

For the first nine months, National Education reported a loss of $1 million, contrasted with net income of $27 million for the same period last year. Revenue for the nine months was $290.3 million, down 7.3% from the year-earlier $313.1 million.

National Education, which also reported a $1.5-million loss for the second quarter, attributed the poor third-quarter results to deep-seated problems at its Applied Learning corporate training subsidiary in Chicago.

National Education also continues to seek refinancing of its existing bank debt and faces elimination of about $62 million in unsecured bank credit if its current banks decline to provide new financing.

The company said Friday that it expects Applied Learning’s fourth-quarter revenue to be “significantly below last year’s performance.”

Beyond signaling that National Education expects to issue a poor fourth-quarter financial report, the meaning of that warning is unclear, industry analysts said.

“It depends on their definition of significant,” said Ram Capoor, an analyst with Morgan Stanley & Co in New York.

“The fourth quarter traditionally is the strongest for Applied Learning, so ‘significantly lower’ earnings still could be a profit.”

National Education officials could not be reached Friday for comment.

Capoor and Boksen said that the company has three other business segments that remain relatively healthy.