Cheers---& Some Groans

In the outpouring of third-quarter earnings reports last week, most companies found plenty to cheer about. Even where sales were off, the drop was so heavily cushioned by the cut in taxes this year, that in most cases net profits held up well. Of the 600-odd corporations that had reported by last week, almost half racked up substantial gains over the third quarter of prosperous 1953. As a result, many a corporation increased its dividends or handed out extras.

The highest flyers were the airlines and aircraft manufacturers (see below). Trans World Airlines' earnings climbed to $7,086,000 for the third quarter, well above the $5,064,392 T.W.A. earned all last year. Busy United Air Lines logged a third-quarter record of more than 1 billion revenue passenger miles, sent its earnings soaring to $5,960,617, a full 51% above the comparable period last year. Lockheed Aircraft Corp. pushed its profits up to $6,000,000, or 76.5% above 1953's third quarter; it raised its quarterly dividend from 50-c- to 60-c-, declared an extra 50-c- cash and a 5% stock dividend.

Better Times. Westinghouse Electric Corp.'s President Gwilym A. Price reported a third-quarter sales record of $401,674,000, a good 4.9% better than the previous record set last year, though the net was down 1.7%. For 1954's first nine months, said Price, Westinghouse sales of $1,213,000,000 broke alltime records, along with earnings which were up 17.7%, to $62,644,000 ($3.77 per common share). Moreover, President Price reported a general quickening of business, and the board of directors declared an extra 50-c- dividend. Despite a 7% dip in sales, General Electric rolled up a new nine-month earnings record of $140,691,000, about 20% above the figure for last year.

Utilities and building materials continued their climb. Owens-Corning Fiberglas profits rode the building boom up a whopping 53.6%, to $2,293,257. Standard Oil of California boosted 1953's third-quarter profits by 4.2%, to $50,876,733, and tacked an extra 75-c- onto its regular 75-c- quarterly dividend. But Standard Oil Co. (N.J.) eased off 11.5%, to $145 million.

Steel Doldrums. Amid the general rejoicing, there were some groans of dismay. Alcoa was off 11.4%, to $11,525,459. In the chemical industry, American Cyanamid's earnings went up 14%, to $6,434,475, but Union Carbide and Carbon's net slid to $21,342,676, down 19.3%, and Allied Chemical & Dye was off 23.3%, to $9,220,527.

The steel industry was still in the doldrums. With production running well below 70% of capacity from July through September, U.S. Steel's earnings slipped to $44,323,860, v. $61,706,264 for 1953s third quarter. Republic's earnings dropped 26.7%, to $10,302,001; Youngstown Sheet and Tube profits tumbled almost 45%, to $4,474,003. But Armco Steel Corp. held its own, turned in a profit of $10,167,361, or $1.95 a share.

Green Light. The railroads, too, were still feeling the effects of the recession and the drop in traffic. Although some, e.g., Union Pacific, did almost as well as last year, most of them reported a drop in profits. But many of them also reported that traffic was picking up. The Pennsylvania, which had been in the red most of the year, moved into the black in September, declared its first dividend of the year (75-c-). One of the best performances was turned in by the New York, New Haven and Hartford under new President Patrick B. McGinnis. Its quarterly net was $2,591,190, a big 64.4% over last year's third quarter.

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