Business: The Box Score

Despite all the grandstand opinion on how the economy is doing, the heart of the story is told in the box score: company earnings. Last week, as a flood of third-quarter earnings came out, there were some expected strikeouts. But there were also a surprising number of clean base hits where none were expected.

Steel. In the depressed steel industry, U.S. Steel Chairman Roger Blough came up with a hit. Even though its mills were operating at only 47.8% of capacity, the company earned 85¢ per share in the third quarter, more than enough to cover its 75¢ quarterly dividend. While the third quarter was down steeply from the $1.38 per share earned in the second Quarter, nine-month earnings of $4.20 per share this year were well ahead of the $3.80 in strike-harassed 1959.

Blough held out a measure of hope that the worst of steel’s recession may be over: “Our customers’ inventories have dropped to between 10 million and 12 million tons. It’s really too low. They normally should run around 15 million and 16 million tons.”

Bethlehem earned 24¢ per share, down from 62¢ in the second quarter, bringing nine-month earnings to $1.96 per share v. $1.75 per share last year. Bethlehem Chairman A. B. Homer assured shareholders that by year’s end, earnings will be enough to cover the $2.40 per share annual dividends. Inland earned 28¢ against 82¢ in the second quarter, putting nine-month earnings at $2.17 per share compared with $1.99 in 1959.

Railroads. Eastern railroads had no cheer at all to offer stockholders. The Pennsylvania, taking a double blow from sagging steel shipments and a 12-day strike, lost $4.5 million in September for a nine-month deficit of $9.4 million v. $449,000 last year. Chairman James Symes held out no hope that the road could finish the year in the black. The rattling New Haven lost $1.8 million in September, running its nine-month losses to $11.4 million. The New York Central lost $2.7 million in September, putting it $2.5 million in the red for the first nine months of this year compared to a profit of $3.4 million last year.

Oil. From the beleaguered oil industry, long plagued by surpluses and price cutting, the news was good across the board. Jersey Standard had indicated third-quarter earnings of 86¢ per share, up from 75¢, boosting its nine-month profits to $2.31 per share from $2.22. Gulf Oil third-quarter profits were 79¢ per share, up from 72¢; Sun Oil, $1.20, up from 87¢; Texaco, $1.68, up from $1.63; Tidewater, 85¢,up from 58¢.

Autos. For the first time since 1957 Chrysler Corp. managed to make a third-quarter profit due to the sales of the compact Valiant and the Dodge Dart. While only $1.4 million, it compared with a loss of $34.2 million last year. Nine-month earnings were also ahead, $2.84 per share this year v. $2.73 last year. On the other hand, earnings of General Motors, hit by high tooling costs for its new compact cars, dropped 34% in the third quarter from 47^ per share to 30^ on a 5% sales increase. Nine-months earnings also ran behind a year ago, $2.45 per share v. $2.55.

Others. Food company profits were up: National Biscuit earned 95¢ per share against 86¢. Chemicals dropped: American Cyanamid was down to 40¢per share from 61¢; Olin Mathieson to 58¢ from 69¢ the third quarter last year.

The mixed earnings proved that the business slowdown is not hitting every place at once, adding support to the position that the U.S. is in a “rolling readjustment,” rather than an overall recession.