With anxious attention now focusing on 1967, early-reporting U.S. corporations are supplying emphatic reminders that 1966, despite a selective year-end slowdown, was the most prosperous year in U.S. history. Items: Bethlehem Steel, in an industry that often seems to roll its profit margins thinner year by year, far outstripped its 3.5% sales increase with a 14% rise in earnings to $171 million. To fatten sales as well, Bethlehem is pushing an invasion of the Midwest with a $500 million expansion of its Burns Harbor plant near Chicago, long a virtual fiefdom of Inland Steel.
Westinghouse Electric, which faced tough labor negotiations, strikes and a big wage hike last fall, came through the fourth quarter with earnings down 3.5% despite rising sales. But that only slightly spoiled a record year of profits, which were up 12%, to $120 million. With heavy orders for nuclear generating plants, defense and space equipment, President Donald C. Burnham expects to spend half again as much on expansion as last year’s $110 million. — Jersey Standard, the largest oil producer, ended the year with profits up 5.2%, to $1.1 billion, despite a squeeze that forced fourth-quarter earnings be-low the 1965 period. Higher worldwide taxes and other payments ($4.7 billion) did the major damage—and 1967 will be no easier. Chairman Michael Haider thinks that the proposed 6% tax surcharge would not hurt much, but that loss of the 7% investment tax credit could be important in a company that spends $1 billion a year on expansion. — IBM might ask, “What fourth-quarter slump?” since its profits were up 13%, to a record $142 million. For the year, it had its 15th earnings record in a row, with $526 million for a 10% rise over 1965. But because of start-up costs for its System/360 computers, earnings have lagged behind sales, which rose 19%, to $4.2 billion. To increase income, IBM has cut the 360’s purchase price by 3% to speed sales, raised its rental fee 3% to expand revenues. > Xerox also bounded to its 15th successive earnings record, with profits up 36%, to $80 million. Thanks to what Chairman Joseph C. Wilson called an “important reversal” in orders for its once slow-moving 2400 copier, earnings outraced increasing costs. Though the year-long gain was nothing like 1965’s 47% leap, Wilson seemed almost embarrassed. Some time in the future, he warned, “our percentage rate of growth must, of course, diminish.” — Kennecott Copper, one of the three biggest U.S. copper producers, turned a first-half slump resulting from strikes in Chile into a booming year with profits up 22%, to $125 million. Thanks to heavy Pentagon orders and higher prices abroad, Kennecott is well polished for its upcoming $466 million merger with another profitmaker, St. Louis’ Peabody Coal Co., second largest in the U.S. — The Pennsylvania Railroad, biggest in the U.S., highballed through 1966 to consolidated earnings of $90 million for a 29% gain over 1965. Yet the Pennsy finished behind the Norfolk & Western, which Pennsy Chairman Stuart Saunders once headed and now blames for delaying the Penn Central merger. N. & W.’s profits rose 8.6%, to a record $98 million, even though it paid the Pennsy some $10 million—which accounted for almost half of Pennsy’s earnings gain— to buy back some of its own stock. > Trans World Airlines began 1966 with its first dividend in 30 years and high hopes for soaring profits— only to be grounded along with four other airlines during the 43-day machinists’ strike. TWA wound up the year with earnings down 40%, to $30 million, but it still plans to keep up its $1-a-year dividends. It has good reason: barring any more interruptions, airline traffic should rise 17% this year. > Texas Instruments, whose profits have grown at an average rate of 31 % a year since 1946, did it again, with earnings up 36%, to $34 million. Still, Chairman Patrick E. Haggerty has some small doubts about how the big maker of tiny transistors and integrated circuits will do in 1967. The rate of new orders has “declined appreciably,” so he ordered a temporary cutback of sorts in his Dallas plant: normal eight-hour work shifts were shortened by precisely 30 minutes.