Best Ever?

"Our earnings for 1959 will reach a new high, barring a steel strike or a similar calamity." So said National Steel's Chairman George M. Humphrey, former Secretary of the Treasury, as he announced last week that National's first-quarter earnings were "three or four times larger than the first quarter of last year," when they were 51-c- a share. Many a U.S. businessman echoed George Humphrey. The first wave of anxiously awaited first-quarter earnings proved higher than almost anyone had expected. The week's most general prediction for the nation's business: "The best year ever."

Shouted Down. Where the U.S. consumer reigns, the gains were most striking. U.S. smokers, puffing away at a record rate, upped both sales and profits of R. J. Reynolds Tobacco Co. (Camel, Winston, Salem) and P. Lorillard Co. (Kent, Newport, Old Gold), both of whose stockholders approved stock splits to make room for further growth. When a stockholder tried to ask a few critical questions of Reynolds Chairman John C. Whitaker, other stockholders were already so taken with the good news that they stamped their feet, shouted the dissenter down.

The U.S. telephoned with such enthusiasm in the first quarter that it helped American Telephone & Telegraph raise its per-share earnings from $2.76 last year to $2.81. The Bell System, announced President Fred Kappel, added about 725,000 new telephones in the quarter, 66% more than in the first three months of 1958. The telegraph wires were also humming; Western Union announced a first-quarter profit of 55-c- a share v. 32-c- in 1958.

Beauty & Food. The hard-hit appliance industry came back in strength. Earnings of Whirlpool Corp. were up sharply from last year's 29^ a share to 80^. With sales up 12% in the first quarter, Borg-Warner Corp.'s President Robert S. Ingersoll announced a 45% hike in earnings, noted that Borg-Warner has "a very substantial portion" of the parts orders for the Ford and General Motors small cars. Admiral Corp., reported a profit on a sales rise of 15%. Said President Ross D. Siragusa: "All the bad things are behind us."

In the beauty and food industries, the U.S. housewife continued to take good care of herself--and of the companies that serve her. Revlon, Inc.'s first-quarter earnings jumped from last year's 84-c-a share to 91-c-. Said Revlon President Charles Revson: "1959 should be the largest year we ever had." National Biscuit Co. expects first-quarter earnings to be about the same as last year, but looks for "continued improvement" in sales and earnings for the rest of 1959; General Baking Co. and Hiram Walker distillers both reported increased quarterly profits.

Rebounding from a first-quarter loss last year, United Air Lines announced that it will show a profit this year on the basis of "record revenues." Said President W. A. Patterson: "The unprecedented traffic was partly due to the improvement in economic conditions generally and the gradually heavier use of air travel for business reasons."

Bluest Chip. Heavier industry stirred with the same snappy figures. "We are well on our way to our best year," said William F. O'Neil, president of General Tire & Rubber Co., who announced nearly quadrupled profits on a sales rise of 42%. After a first-quarter loss last year, General Time Corp. posted a profit of 70-c- a share in the first twelve weeks of 1959.

International Business Machines, the bluest chip on Wall St., chalked up the highest sales and earnings of any first quarter in its history, $2.38 a share v. $1.93 last year. Oilman George F. Getty II, president of Tidewater Oil Co., estimated that his company will make about $8,000,000 in the first quarter -v. $800,000 last year. The world's largest oil company, Standard Oil Co. (New Jersey), reported a new record in sales for the first quarter; the company's profit position should improve from last year's slump, said Chairman Eugene Holman and President M. J. Rathbone, even if present price weaknesses continue.

The improvement in general business conditions led Crown Zellerbach Corp. to predict "a very good first quarter," and President A. B. Layton added that the paper industry .will operate at up to 90% of capacity in 1959. The St. Regis Paper Co. reported first-quarter earnings of 52% over 1958 on a sales gain of 12%, or 64-c- a share v. last year's 42-c-. Production for the industry in 1959, said Chairman Roy K. Ferguson, is expected to reach a new high of 32.5 million tons. "Paperboard production has shown the greatest strength, with no evidence of important inventory accumulation yet."

Price Cuts Ahead? One result of such hefty profit figures may be price cuts. Fortnight ago American Can Co. announced the second price reduction in its products in three months, representing a total cut of $15 million in its annual dollar volume. Last week American Can was nonetheless able to announce that profits for both the first and second quarters of the year will be better than last year. A major reason: sales volume "has already gone up" as a result of the price cuts.

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