PROFITS: Better than Ever

BUSINESSMEN have been worrying that higher taxes, tight money and the rising cost of labor would combine to pinch their profits this year. That feeling was strengthened when a drop in automakers' earnings stalled the six-year rise in total industrial profits during the second quarter. But last week early reports for the third quarter indicated that corporate income has rebounded to a new postwar peak of close to $50 billion a year after taxes.

Sharp profit increases spread across such industries as electric manufacturing, data processing, papermaking, drugs and rubber. Record third-quarter earnings were reported by such diverse companies as General Foods, Chas, Pfizer, Bristol-Myers, Honeywell, Olin Mathieson Chemical, Sun Oil, Crown Zellerbach and U.S. Rubber. Sperry Rand's after-tax income was up 44% from the third quarter of last year, Republic Steel's 49% , Alcoa's 66% , W. R. Grace's 74% , Polaroid's 77%. Still, profits fell short of investor expectations for numerous companies in aircraft, chemicals, machinery and building materials. A sampling of corporate fortunes in the third quarter:

> General Electric, where 5,900 striking defense workers last week were ordered back to work under a Taft-Hartley Act injunction, enjoyed record sales of $1.8 billion, up 21%, and record profits of $99,228,000, up 16% from the third quarter a year ago. Westinghouse, which at week's end settled with 40,000 electrical workers, reported a 14% gain, with profits up to $31,284,000.

> Radio Corporation of America thrived on color television. Having doubled its production facilities for receiving sets, RCA boosted profits 29% above the previous year's mark, to $29,900,000.

> Xerox, battling competition from some 40 other electrostatic office copiers, reflected a pressure common in many other industries: shrinking profits per dollar of sales. Despite peak revenues, profits slipped 8% below those of the second quarter of 1966 (to $18,719,378), though they remained 27% above last year's third quarter.

> Eastman Kodak, thanks to a rising demand for color film, clicked off a $82,279,000 profit, up 22% from a year earlier.

> R. J. Reynolds, the nation's No. 1 tobacco manufacturer, cashed in on the growing popularity of king-size cigarettes with record $37,335,000 profits, up 5.4%, even though sales of regular-size Camels continued to decline in line with the industry trend.

> United Air Lines, shut down 43 days by the airling strike that ended Aug. 19, reported a $2,017,000 loss against $21,369,239 profit in the third quarter of 1965. The setback was cushioned by $17,296,000 received from four nonstruck lines under a mutual-aid agreement, and by post-strike earnings of $6,353,000 in September, when passenger travel spurted 20% above its last-year level. American Airlines, which continued to fly, paid $29 million to strike-bound carriers, nevertheless earned $24,447,017--a 52% increase from last year's third quarter.

>Weyerhaeuser Co., giant of the forest-products field, suffered a 17% falloff in profits, to $16,662,500, despite record sales. Chief reason: a sharp drop in building-materials prices caused by the slump in home building.

> Du Pont, largest U.S. producer of chemicals, blamed weaker demand and rising imports of low-tariff synthetic textile fibers for its first drop in year-to-year quarterly earnings since mid-1963. Profits sank to $90 million as against $98 million a year earlier.

> Reynolds Metals, with demand for aluminum outstripping the nation's smelting capacity, dipped into the Government stockpile for metal in order to avert a shortage, pushed its profits to $15,617,000, up 38% from 1965's third quarter.

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