EARNINGS: Picking the Winners

As the bull market continued to edge up last week, investors kept a sharp eye on the form sheets of second-quarter earnings and hustled to place their money on the winners. Most sparkling performer was Chrysler Corp. President Lester Lum (“Tex”) Colbert reported a 20% jump in net to $44 million in the first six months despite a 10% drop in sales (to $1.3 billion). Chrysler’s good showing, said the company, resulted from auto-price increases big enough (15% in a year) to overcome higher taxes (up 220%), and higher unit costs caused by restricted auto output (582,984 units v. 804,884 in 1951’s first half). At the news, Chrysler jumped 3 points to 82 ⅜, a new high for the year. General Motors, which had earlier reported a second-quarter net of $142 million, up 2%, rose nearly a point to 61 3⅜. That was the highest price in GM’s history.

Not all the earnings were good. When Wilson & Co. reported that earnings were too small to pay the regular 25¢ dividend, Wilson dropped nearly two points to a new low of 10. The stock of Celanese Corp. dropped 2⅛ points to 42⅞ when the company reported that its second-quarter profits, hard hit by the textile slump, were down 95% to $215,327, not even enough to cover the dividend on the preferred stock. Western Union, which reported that the seven-week telegraph strike caused a $3,902,125 half-year loss v. a $4,246,672 net in 1951, was knocked down nearly two points to 42.

Other company reports:

¶ Like giant Bethlehem (off 77% to $5.3 million), other steel companies showed the drastic effects of 28 strikebound days in the second quarter. National Steel’s earnings were cut in half to $6.8 million; Sharon lost $430,280 v. a 1951 profit of $2.8 million; Follansbee’s net dropped from $605,205 to $35,167.

¶ Despite strikes, Socony-Vacuum netted $84 million for the first half, up 10% to a new record. But Standard Oil of California’s second-quarter net was down 2.5% to $45.4 million; Texas Co.’s was down 19% to $40 million.