Down, but . . .

As the first-quarter earnings began to pour out last week, the trend was down, as expected by businessmen. But what was not expected was the surprising fact that in some industries, profits were actually climbing, some to new records. Hard hit were the durable-goods industries, railroads and raw materials, while many of the consumer-goods makers hummed along scarcely bothered by the recession.

Pittsburgh Steel operated at a loss in the first quarter and expects a glum second quarter, even though "we have several indications that the bottom in demand was passed some time ago." Lukens Steel, hit by the slowdown in shipbuilding and heavy construction, said that first-quarter earnings will show a sharp dip from last year, when it was the industry's brightest star. But Lukens expects that 1958 as a whole will prove "a strong year."

As Eastern railroads skidded (TIME, April 14). the Erie wheezed in with a quarterly deficit of $2.800.000. pared executives' salaries by 10%. Chemicals and paper companies continued to feel the pinch. For Union Carbide, second biggest U.S. chemical maker (first: Du Pont), the first-quarter net tumbled to 70-c- a share v. $1.18 a year ago. International Paper Co. sales slipped 10% for the quarter, and earnings will show a sharper drop. In appliances. Whirlpool's per-share earnings were almost halved to 25-c- a share. Admiral Corp.'s earnings also dipped, and Philco "will undoubtedly show a loss" for the first quarter.

On the brighter side, most consumer and service industries were booming. The world's biggest money earner. American Telephone & Telegraph, which installed 450,000 new phones in the quarter (down from 775,000 a year ago), reported profits of $2.76 a share (up from $2.63 a year ago). International Business Machines rang up record sales, and its quarterly profits soared to $1.98 a share from $1.78 for 1957's first quarter, when there were fewer shares outstanding. Revlon's earnings edged up slightly to a new record. Fast-moving Polaroid's net jumped to 31-c-, up from 22-c-. In tobaccos, R. J. Reynolds (Camel, Winston, Salem) said profits were above the $1.25 a share of a year ago. P. Lorillard President Lewis Gruber, riding the phenomenal rise of filter Rents, reported that January-February earnings soared by 400% over 1957's first quarter.

Americans were buying more food than ever. Kroger Co. earnings hit a record $1.27, up from $1.14 on fewer shares a year ago. National Biscuit Co. expected slightly better earnings than last year, as did General Baking Co. Grand Union increased its dividend from 18-c- to 20-c- a quarter on the basis of record sales. And General Foods, buoyed up by the best first quarter in its history, broke into the elite $1 billion sales club for the first time in the fiscal year ending March 31.

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