Westinghouse & Earnings

To the 46,000 stockholders of Westinghouse Electric & Manufacturing Co. went last week an exhaustive annual report accompanied by an elaborate 40-page booklet prepared in connection with the company's soth anniversary celebration. Westinghouse, Past, Present and Future paid long and deserved homage to Founder George Westinghouse, the prolific Yankee genius who invented the railroad air brake before he was 23, later pioneered in electrical equipment.* Conspicuously missing from the commemorative booklet was the fact that George Westinghouse was ousted from his own company seven years before he died in 1914 at the age of 67. His company's failure during the Panic of 1907 constituted the great tragedy in George Westinghouse's prodigious career. In the subsequent reorganization he was squeezed out.

But Westinghouse stockholders had more pleasant things to think about than George Westinghouse's last sad years. For 1935 the company reported profits of nearly $12,000,000, best figure since 1929 and a whopping increase over the measly $189,000 reported for 1934. In the three years before that, Westinghouse piled up $20,000,000 worth of deficits, and its stock sold as low as $15 per share. Last week Westinghouse was up to $115.

Like its bigger competitor, General Electric, Westinghouse spraddles the entire field of electrical equipment. At its tremendous East Pittsburgh works it can make anything from waterwheel generators for Boulder Dam to complete power and control apparatus for steel rolling mills. At Derry, Pa. and Emeryville, Calif, it fabricates porcelain insulators. The Chicopee Falls (Mass.) plant turns out radio equipment. The Newark (N. J.) plant manufactures metres. Power transformers and transmission equipment are produced at Sharon, Pa. Diesel-electric units, steam turbines, marine reducing gears emerge from the South Philadelphia works. A Long Island City (N. Y.) plant specializes in X-ray equipment, a Cleveland plant in lighting fixtures, a Homewood (Pa.) plant in repairs and replacements. The East Springfield (Mass.) factory concentrates on fractional horsepower motors and the things they operate -- fans, vacuum cleaners, food mixers, refrigerator units. Refrigerator cabinets, irons, ranges, toasters are made in Mansfield, Ohio. Westinghouse elevators come from Chicago, Westinghouse bulbs from three New Jersey plants of a subsidiary. Bryant Electric Co., subsidiary, turns out sockets, switches, wiring accessories in Bridgeport, Conn.

In the centre of this amazingly decentralized Westinghouse organization employing 35,000 workers sits Chairman Andrew Wells Robertson, a 56-year-old onetime school teacher who made his mark operating Pittsburgh's street car system. He stepped into Westinghouse in 1929. In the report last week President Frank Anderson Merrick joined Chairman Robertson in predicting: "Unforeseen events may change estimates for better or for worse; but, to the best of our judgment, 1936 should be a fairly prosperous year. We are making plans accordingly."

Westinghouse sales in 1935 footed up to $122,000,000, an increase over the previous year of 33%. Last week in a preliminary report General Electric showed 1935 sales of $208,000,000, an increase of 27%. From the 1929 peak to Depression's low Westinghouse sales declined 69%, GE sales 67%. And while Westinghouse was unable to make any money for three years, GE managed to show a $13,000,000 profit even in 1933. GE's profit for last year was $27,000,000, inspiring a boost in quarterly dividend payments on its 28,800,000 shares from 20-c- to 25-c-.

Other notable 1935 earnings:

American Sugar, despite the highest sugar prices in years, made $3,571,000 in 1935, a considerable slide from the $4,877,000 profit in 1934. Chairman Earl D. Babst loudly blamed the company's loss of business on Government quotas, declared that import allowances for refined sugar from Cuba, Puerto Rico and the Philippines had made refineries hum on those islands while "domestic refineries are working at half capacity."

International Harvester's 1935 sales of $217,500,000 were 57% better than the year before, reflecting higher farm purchasing power. Profits rose from $3,900,000 in 1934 to $19,600,000, leaving something applicable to the common stock after preferred dividends for the first time since 1930.

U.S. Rubber continued to recover under du Pont management, reporting net income of $2,200,000, a notable improvement over the $544,000 deficit reported the previous year, an incalculable improvement over the $40,000,000 in deficits accumulated early in Depression.

* Only corporate connection between Westinghouse Electric and Westinghouse Air Brake is their common founder.

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