Earnings

A prime indicator of better business lately is a waning interest in day-to-day Washington news, a rising interest in Business itself. Most U. S. businessmen still damn the New Deal as freely as ever--but not in impotent rage. Less than a year ago they were hysterically predicting the doom of the profit system. Now they ease their minds with forthright opposition to White House policies, count on the courts to sustain their objections and devote more thought to making and selling goods. But the most soothing influence on jittery business nerves has been profits.

Last week the Wall Street Journal tabulated statements of the first 25 U. S. corporations to report for the June quarter, found aggregate profits up 7% from the same three months of 1934. The gain for the six-month period was almost precisely the same. For a slightly smaller group which had published comparable reports in the past, June quarter profits were 40% above 1933, 102% above 1932, but still below 1931. No major steel companies had reported by last week but the rest of U. S. industry had been fairly sampled.

Typical earnings: Johns-Manville, thriving on a mounting volume of residential building construction, reported profits of $798,000 for the first six months of 1935 as against $173,000 in the 1934 half.

Schenley Distillers' June quarter was better than a year ago but profits for the half-year were down $1,200,000 to $3,000,000. Reason: Schenley's liquor sales were abnormally high in the first few months of 1934, following Repeal.

Caterpillar Tractor, now the No. 1 maker of Diesel engines in the U. S., has been a big beneficiary of the New Deal. Rising farm income and PWA expenditures, particularly for road building, boosted sales from $13,000,000 in the first half of 1934 to $18,700,000 this year. Profits for the half were up from $2,000,000 to $2,900,000.

Owens-Illinois Glass, No. 1 bottle-maker in the U. S., always reports for the previous twelve months like a public utility, not by quarters or halves. This running method of accounting automatically eliminates seasonal ups & downs because statements reflect a full year's operations irrespective of the calendar date. For the twelve months to July 1, Owens-Illinois reported profits of $7,100,000 as against $5,800,000 in the previous fiscal year.

United Fruit stock dropped suddenly from $90 per share to $75 in one day shortly after the company reported profits for the June quarter (before taxes) down from $4,700,000 in 1934 to $2,300,000 this year. Official explanation for the 50% decline in earnings was a cut in French and German banana quotas. Another reason was supposed to be appropriation of heavy reserves against possible losses on foreign accounts, principally German.

General Electric's first half profits of $11,500,000 amounted to 40-c- for each of its 28,800,000 shares outstanding. That compared with $9,400,000 profits in the same period last year. Orders for the first six months of 1935 were up 13% to $104,000,000.

National Biscuit's profits for the first half were reduced by labor troubles, processing taxes and higher prices for grains. Earnings of $6,200,000 in the 1934 period slumped to $4,200,000 this year.

Chrysler Corp., in its semi-annual report issued this week, showed 818,700,000 profits--more than 100% better than during the first half of 1934. Chrysler sales, 487,157 units, were the largest of any six months in the corporation's history.

RFC, reporting for the Federal fiscal year just closed, showed net earnings of $41,200,000 as against $21,700,000 in the previous fiscal period. As all the world knows, RFC is a $4,000,000,000 banking institution, deriving its revenues (as opposed to capital funds) from interest on loans. Chairman Jesse Jones, who does not have to worry about dividends for his lone stockholder, the Treasury, noted with pride that his RFC now has an earned surplus of $100,000,000.

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