Business: Competition Closes In

As second-quarter earnings reports began to come out last week, many a company reported record sales and earnings. For others, the news about profits was less gay. They complained about the cost-price squeeze and increased competition. Companies with higher and in some cases record first-half earnings per share were: 1960 1959 IBM $4.19 $3.51 Westinghouse Electric $1.14 $ .96 Allied Chemical $1.55 $1.40 Scott Paper $1.66 $1.48 Parke, Davis $1.02 $ .93 P. R. Mallory $1.32 $1.30 Heyden Newport Chemical $ .82 $ .60

There was also a summer sprinkling of dividend increases. Ford Motor Co. boosted the quarterly dividend from 60¢ to 75¢ and R. J. Reynolds Tobacco Co.

from 55¢ to 65¢.

Companies reporting lower earnings per share in the first half were: 1960 1959

General Electric $1.26 $1.34

St. Regis Paper $1.20 $1.54

A. & P. $ .63 $ .66

(13 weeks ending May 28)

The earnings outlook for the second half is toward narrower profit margins, the Commerce Department said last week. “Profit ratios generally narrow.” said the department, “after a cyclical upswing has been in progress for some time.” The department reported that in the first quarter, profits rose to the annual pre-tax rate of $48.8 billion, up $4 billion from the last quarter of 1959, and up $1.8 billion above the rate for all of last year. Budget Director Maurice Stans says it is “a little premature” to forecast the corporate profit rate for 1960, but he cautions that the Government’s revenue forecasts of $84 billion “will certainly be squeezed if earnings are anything less than $51 billion for the year.”