Second-Best Year

Taking a fast, happy look at the second-quarter balance sheets of U.S. corporations, the President's Council of Economic Advisers reported last week that profits hit an estimated annual rate of $21.2 billion, or $800 million more than during 1955's first three months. Compared with the second quarter a year ago, the gain was more surprising; profits were up $4.4 billion over the spring of 1954, when business was in a slight slump. If earnings continue at the present annual rate, said CEA, they will be the second biggest on record, topped only by the $22.1 billion made during the 1950 Korean war boom.

Red into Black. Many of the second-quarter reports dramatically underlined the uprush in sales achieved by almost every U.S. company. American Motors (Nash, Hudson), struggling against odds to improve its share of the auto market, had the first profitable quarter since its merger (May 1, 1954). Earnings hit $1,592,307 against a loss of $3,848,667 during the same period last year. Caterpillar Tractor also did better this year, earning $8,390,403 in the second quarter v. $7,007,326 a year ago. Glen Alden Corp., after suffering through years of a coal depression, earned $1,695,000 during the first half of 1955, compared to a loss of $169,000 last year, with part of the gain due to improved coal business and part due to its recent move into other lines.

For many a corporation, earnings were the best ever. Pacing the parade was the steel industry, helped by heavy orders from the auto and construction industries. Although U.S. Steel and the other giants were still to be heard from, the first 15 steel companies to report all had higher earnings. Youngstown Sheet & Tube earned $10,031,014 v. $6,081,216 during 1954's second quarter. For the same periods, Crucible Steel earned $4,036,579 v. $782,470.

Rolling happily along with the building boom, Johns-Manville earned more than it ever did before in any second quarter, making $6,531,742 v. $5,435,663 a year ago. National Gypsum broke all first-half earnings records as it made $7,789,000 v. $5,914,000 in 1954.

Records were also made in the chemical industry. Du Pont announced that for the first half of 1955 it earned $3.98 a share, a new six-month record topping the old high for the period of $3.22 a share, set just a year ago. Union Carbide earned $35,217,819 during the second quarter, almost 75% more than it made in the same three months a year ago.

Black into Gold. In the electrical equipment field, General Electric's earnings set a new peak for the second quarter, going from $45,827,000 last year to $51,323,000 this year. Sylvania told the same happy tale, with its $2,840,364 earnings setting an alltime second-quarter high for the company and more than doubling its earnings of $1,401,298 during the period last year. The high level of consumer income and spending showed up in food-company earnings. Pepsi-Cola hit the brightest spot: six-month net shot up to $4,300,000, an 80% gain over last year's $2,385,000.

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