Two-Tone

News from Detroit last week could best be described as two-tone. The darker hue was painted by General Motors: the world's largest automaker reported that first-quarter sales were off 15% from last year to $4.85 billion. Earnings as a result slipped 34.5% to $389.6 million, the poorest first-quarter profit for G.M. in five years. Balancing all that, however, were brighter prospects for the auto industry as a whole. Braced by an unexpectedly strong upturn in sales during April, auto companies have revised their production schedules for the second quarter. Altogether, 2,155,000 cars will be produced--80,000 more than had been intended.

General Motors, for whatever comfort it could find, was not alone in its sales and earnings sag. Enough corporations held annual meetings and reported first-quarter results last week so that patterns became clear. Surveying 514 companies, the New York Times found their combined profits off 7.3%, compared to last year. A similar survey by the Wall Street Journal of 468 companies showed after-tax earnings down 9% for the quarter. The sharpest drops were in autos, steel, rails, textiles, aircraft and building materials. Moderate gains were registered in office equipment, petroleum, tobacco, publishing and utilities. Here, too, the news was two-tone, and the future looked significantly better than the past. The Commerce Department reported that of the 18 leading indicators available so far for March, eleven were up. These included new machinery orders, housing starts, stock prices, and the rate of change in the money supply. Not since March of 1966 had a majority of indicators turned up together, and the change was enough to cheer many a chief executive addressing stockholders.

Among results reported last week:

> Olin Mathieson, running counter to a downward trend among chemical companies, had a record 36% rise in earnings for the quarter to $16,600,000. Sales, said President Gordon Grand, were $284 million, or 11% higher than last year, because of "strong contributions from agricultural chemicals, copper-base alloys, Winchester-Western, Olinkraft forest products and from our Squibb division."

> Oil companies agreed that the quarter had been good. Shell's earnings were up 7% to $66 million, Texaco's up 8.7% to a record $191 million, Mobil's up 9% to $93 million. Smaller Continental Oil had a 26.3% increase in profits to $31 million. Jersey Standard, biggest of them all, was beset by lower product prices abroad and increased costs, and managed only to equal last year's first-quarter earnings of $294 million despite a 7% rise in revenues. Gulf and Phillips Petroleum, on the other hand, did so well that they increased dividends.

> Steels were generally down. Management blamed the drop on higher operating costs and a profit squeeze caused by increased employee benefits. U.S. Steel Chairman Roger Blough reported sales up 15.8% for the quarter to $965 million, but profits down 18% to $41 million. Second-ranked Bethlehem Steel showed a 4% increase in sales to $638 million, but earnings were off 12.5% to $32 million.

> Airlines were mixed. United President George E. Keck announced a 20% increase in net income to $6,873,000 after a 19% increase in revenues to $242 million, due to gains in both passenger and air freight. TWA, on the other hand, increased revenues to $177 million, but expenses rose to $189 million and the company finished the quarter in the color that decorates its all-jet fleet--red.

> Two nearly-weds (see below) each reported an unhappy first quarter alone. The Pennsylvania Railroad, plagued by the weather as well as a drop in industrial output, had operating revenues of $217 million for the quarter, a $3,000,000 drop from last year, and net income of $2,855,000, a 44% drop. The New York Central similarly decreased 4% in revenues to $153.8 million and showed a net loss of $1,959,000 for the quarter v. a $7,600,000 profit last year. President Alfred E. Perlman, however, is hopeful that since the Central is the largest hauler of auto parts and new cars, an upturn in auto production will mean a rise in revenues.

Two other companies gave their shareholders differing reports last week. General Electric President Fred J. Borch admitted at an annual meeting in Dallas that G.E., which in mid-April had reported an 11% first-quarter earnings drop, is losing money on computers and nuclear-power plants and is concerned enough about a profits squeeze to spend $600 million this year on "mechanization" to cut production costs. American Express, which does not release quarterly figures, reported a rise in first-quarter profits and predicted a profitable year. Part of the profit will come from credit cards; American Express recently signed up its 2,000,000th cardholder.

This file is automatically generated by a robot program, so reader's discretion is required.