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GenCorp Discusses Third Quarter Earnings Outlook

11 August 1999

GenCorp Discusses Third Quarter Earnings Outlook

    FAIRLAWN, Ohio, Aug. 11 -- GenCorp , said today
that while it expects diluted earnings per share for the third quarter ending
August 31, 1999 to increase 25% or more compared to $0.41 per diluted share
from the same period a year ago, earnings are expected to be approximately 10%
below current Wall Street consensus estimates as published by First Call.
    While there was no one single factor which caused the change in estimate,
several issues across the business units are contributing to the shortfall.
Vehicle Sealing continues to be challenged by aggressive customer build
schedules, which have resulted in higher overtime, premium freight, and scrap.
Additionally, record high temperatures during the month of July negatively
affected manufacturing efficiency.  In the Performance Chemicals business,
customer deferral of planned volume increases of styrene butadiene latex for
the residential carpet industry, and lower average unit selling prices across
carpet and paper product lines are resulting in lower than expected margins.
In Decorative & Building Products, commercial wallcovering volumes are lower
than expected as market softness continues in the U.S. and U.K.  Additionally,
the business experienced higher costs related to equipment startups for a new
coating line that will enhance future competitiveness, and higher expenses
associated with the conversion of manufacturing processes to comply with new
clean air standards.
    "The projected modest shortfall in earnings for the third quarter reflects
the occurrence of several situations which we expect will begin to improve as
we enter the fourth quarter," said John B. Yasinsky, Chairman and Chief
Executive Officer.  "We are aggressively addressing each of these issues, and
our business units are allocating the necessary resources to take corrective
actions."
    This earnings release contains forward-looking statements as defined by
the Private Securities Litigation Reform Act of 1995.  All statements in this
release and in subsequent discussions with the Company's management, other
than historical information, are forward-looking statements.  A variety of
factors, which are listed in the Forward-Looking Statements section of
Management's Discussion and Analysis in the Company's 1998 annual report and
in the annual report on Form 10K and the Definitive Proxy Statement dated
July 2, 1999, filed with the Securities and Exchange Commission, could cause
actual results or outcomes to differ materially from those expected by the
Company and expressed in the Company's forward-looking statements.
    GenCorp is a $1.7 billion technology-based manufacturer with leading
positions in numerous markets served by its Performance Chemicals, Decorative
& Building Products and Vehicle Sealing businesses, and its aerospace and
defense segment, Aerojet.