But excluding the reorganization charge, its profit was $370 million, an increase of 20 percent.

The insurance profits do not include investment gains and special reorganization charges.

That belief was largely shattered yesterday when the company disclosed the reorganization charge as the cause of its $565 million loss in the second quarter.

The company also said it expected to take a yet-to-be-determined reorganization charge against earnings in the quarter the acquisition is complete.

Excluding the reorganization charge and Infoseek investment, earnings were down 27 percent, to $1.4 billion, or 66 cents a share.

Net income in the comparable quarter a year earlier included a reorganization charge of $521 million.

He added that there would be a reorganization charge in 1996, though it would be smaller than last year's.

Pepsico's annual results also included reorganization charges, plus a special gain.

Earnings suffered, and heavy reorganization charges and layoffs were announced.

Both carriers also recorded reorganization charges and other items.