Better & Better

"We simply have had a ready market for our products, and we've turned out the goods." Thus, Lone Star Steel Co. President Eugene B. Germany explained last week how his company had netted profits of $4.8 million in the first half of the year, more than it had earned all last year. In the same way scores of other companies found a ready market, turned out the goods--and reported record first-half or second-quarter profits last week. As a result, the Department of Commerce estimated that cash dividends paid in the first six months neared $5.4 billion --16% ahead of last year.

Record sales pushed up giant General Electric Co. to a net of $113 million (v. $108 million last year) on sales just below $2 billion. Sylvania's sales high of $155 million produced earnings of $3,000,000 Wrapping up other records in the packaging boom, St. Regis Paper Co. earned $12.3 million v. $8.7 million in the first half of 1955. Continental Can Co. had a half-year record net of $14.5 million, up from $10.3 million last year. High retail sales were reflected in store profits. In its first 24 weeks of the year, Safeway Stores, Inc. netted $9.9 million v. last year's $5.6 million.

The big upsurge in highway and heavy construction more than doubled H. K. Porter's first half 1955 net to $4,000,000 in 1956. Caterpillar Tractor Co. rolled up profits of $26.2 million, 69% above a year ago. Westinghouse Air Brake Co. nearly doubled its net to $12.5 million.

In shipping, American Export Lines profits increased more than tenfold to $3.1 million, thanks largely to increases in cargo volumes, freight rates., postwar Government subsidies. Pennsylvania Railroad's $22.2 million net was its best first half, although high operating expenses caused June returns to slack off.

With the high cost of doing business, top sales sometimes were not enough to guarantee top profits. Allied Chemical & Dye Corp. scored a sales record for its first quarter, but earnings slumped 4% to $25.5 million, partially because of higher wages and freight rates. Du Pont's net from chemicals dropped slightly as a result of the belt-tightening in textiles and autos.

Many companies sacrificed profit gains to plow back huge amounts into research and development. Douglas Aircraft, which increased first-half sales by $17.2 million, saw its net drop from last year's by $860,000. Reason: huge research costs for the Douglas DC-8 jet transport. Better off was Cessna Aircraft. Its big spurt in private aircraft sales returned net earnings of $3.83 per share for the nine months ending June 30, up 50% from a year ago.

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