First-Quarter Touchdown

As the U.S. industrial machine sped along with hardly a shiver or a shake, the President's Council of Economic Advisers estimated that first-quarter profits had run at an annual rate of $30.5 billion, almost $2 billion better than 1949. The first big batch of first-quarter reports furnished statistical proof of the upsurge. Of 203 reports published by last week, 112 showed better earnings than in 1949.

A big gainer was American Telephone & Telegraph Co., which reported a net of $64,400,000 (up 20% from the same period of 1949). When A.T. & T. held its annual stockholders' meeting in Manhattan a few days later, one stockholder said he was worried lest the good earnings and the $9 dividend rate become a target for government regulatory bodies. Why didn't A.T. & T. split its stock three for one, he asked, and thus change the dividend to $3 a share?

President Leroy A. Wilson had a ready answer. In 14 years of dealing with regulatory bodies, he said, he had never heard a criticism of the $9 rate and as far as he was concerned there would be no change. Why, asked another stockholder, does A.T. & T. raise new capital by selling stock instead of floating bonds? Wilson won a ripple of applause as he answered: "The company is ... a stockholders' institution and not a mortgage debt institution which would finally mean that we would run to the Reconstruction Finance Corp. or some other Government agency to bail us out."

Other industrial giants had also put on profitable weight. International Business Machines Corp. was up 10% over last year with a net of $8,606,336; General Electric Co.'s Charles E. Wilson reported first-quarter profits of $36.8 million, 38% ahead of 1949-5 period and highest in the company's history. (G.E. also boosted its quarterly dividend from 50-c- to 60-c-.) For Westinghouse Electric Corp., March was the biggest month in history for its appliance division, and its quarterly profit, which was up 9.4% from a year ago, was $11.8 million.

Clear Skies. The big housing boom had paid off for the building-materials men. A shining example: Johns-Manville Corp. had a net of almost $4,000,000 (v. $2,800,000 last year). The building boom also helped the sales of carpetmakers, while Firth Carpet Co. reported a new and unexpected ally. "Television in the home [means] more visitors . . . and a general realization . . . that many of the other house furnishings are in a somewhat shabby and outmoded condition, particularly the floor coverings."

The peak production at General Motors Corp.* and other auto plants was reflected in the steel and tire industries. Both Allegheny Ludlum Steel Corp. and Pittsburgh Steel Co. racked up bigger profits in the first quarter than they had in all of 1949, and Armco Steel Corp.'s quarterly net of $11.8 million was about 42% above last year's period. B. F. Goodrich Co.'s sales were up 12% over 1949's first quarter; U.S. Rubber Co.'s were up 7%.

To no one's surprise, the booming chemical industry was also up. Monsanto Chemical Co.'s net rose from $4,400,000 to $5,800,000, Union Carbide & Carbon's profit was up from $24.5 million to $27.4 million and Du Pont estimated that increased sales had boosted earnings per share to $1.15 v. 91-c- in last year's first quarter.

Scattered Clouds. Not so fortunate were the strike-harried coal companies. The net of Pittsburgh Consolidation Coal Co., biggest in the U.S., dropped from $3,900,000 to $822,551. The railroads had also felt the effects of the coal strike. Among the hardest hit was Chesapeake & Ohio, whose net plummeted from $5,300,000 to less than $1,000,000.

First reports from the oil companies were both up & down. Atlantic Refining Co. was able to boost its net by 13% (to $8,700,000), but Phillips Petroleum Co., which turned in a $12,713,254 profit in 1949's quarter, was expected to be off more than $2,000,000 this year because of lower prices and lower crude production.

No one could gauge from the first quarter earnings what the entire year would bring. But since the first quarter's earnings are usually not the highest in many industries, it looked as if the year should be mighty good.

*From its record 1949 earnings, G.M. reported last week that it had paid out $6,035,248 in salaries and in cash and stock bonuses to its 61 officers and directors. Top payments went to: President Charles E. Wilson ($586,100); Executive Vice Presidents Albert Bradley ($511,225), Harlow H. Curtice ($496,100) and Marvin E. Coyle ($496,000). Three top vice presidents got slightly more than $400,000. More than 60% of the payments declared were in stock and cash bonuses payable in five yearly installments. G.M. also noted that income taxes on the payments ranged up to 72%, i.e., Wilson would have but $150,000 left after taxes.

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