The Sun Still Shines

Corporation profits in the second quarter were hay made while the sun still shone. From the flow of financial reports streaming off the presses last week it was clear that: 1) sales for most companies were still higher than a year ago; 2) profits were up on an average of 9% over the second quarter of 1944.

For many a company, the V-E day cutbacks had come too late to affect quarterly earnings seriously. For others, excess profits taxes had been a cushion against the drop in gross sales. In top brackets, taxes drop as fast as income, thus help keep earnings steady.

Steel. The steel companies, after months of public worry about their dreary prospects, did remarkably well. Bethlehem Steel Corp. sales were down to $399 million v. $471 a year ago. But taxes were down $4 million; $3 million less was charged to depreciation and depletion. Thus net profit was $8 million, a gain of $1.3 million over 1944's second quarter.

U.S. Steel Corp. estimated its profits at close to $17 million, $1.20 a share v. $1.04. Republic Steel Corp. boosted earnings to 95-c- a share v. 58-c- for the first six months on a sales increase of $7 million.

Oil. Oil-company profits went right on gushing skyward. Net income of the Standard Oil Co. of California for the first half jumped from 1944's $9.8 million to $14.7 million. Smaller Phillips Petroleum did better; its $2.96 a share compared with $1.83 of a year ago. Standard Oil Co. (N.J.) came up with an estimate of a cool $84 million v. $71 million.

Transport. The rail profits, which began to slip in 1943 when the roads moved into the excess-profits brackets, were still going slowly down. The Interstate Commerce Commission reported that in the first five months profits of all Class I roads were down to $439,677,038 from $452,908,089.

But the airlines, thanks to the planes they got back from the Army, were doing very well. The 16 major domestic lines upped their gross some 50% in the first five months this year, managed to up net profits to $8,617,000 from $5,666,000. Only two airlines, Colonial and Northeast, lost money.

No Slump? For many another corporation, General Electric was typical. For the half year, its profits were $25 million v. $21 million last year. More & more, it was apparent that the big slump, which many had expected to follow V-E day, had not occurred. Last week the Department of Commerce predicted that it would not occur this year. It estimated that gross national product in 1945 will be $199 billion, infinitesimally greater than 1944's annus mirabilis.

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