The Lines Are Busy

The recession has slowed but by no means stopped expansion of the world's biggest utility. American Telephone & Telegraph Co. President Frederick R. Kappel reported last week that second-quarter earnings of the Bell System topped those in 1957. A first-quarter decline in the company's business has been reversed.

In the second quarter, Kappel noted, the number of new phones installed totaled "about 500,000--slightly more than in the first quarter," but still well below last year's figure of close to 700,000. Long-distance phone calls rose by 4% during the first half. Together, the two gains helped wipe out the first-quarter downturn in earnings. Net profits for the second quarter totaled $233 million, v. $214 million for the same quarter last year. Revenues were $1.66 billion, v. $1.57 billion last year. Said President Kappel: "While our current rate of gain is lower than in the last few years, nevertheless it is still substantial. We are confident, too, that growing America will continue to want, buy and use more telephone service tomorrow than today."

Half a dozen other big companies also reported second-quarter earnings last week. As expected, steel and autos were still in rough shape. Lukens Steel reported sales down 17% (to $51 million), profits off nearly 50% (to $3,000,000) for the first six months of 1958. Ford Motor Co. was even worse off. Its earnings dropped 77% to only $22.7 million in 1958's first quarter, thus failing to earn the 60-c- dividend. Last week the company gave stockholders more bad news. It cut its dividend to 40-c- per share, raising speculation that it might have run in the red in the second quarter.

There were significant items on the brighter side. In food, Safeway Stores showed that consumers are going right on buying, with sales up 4% to almost $1 billion for 1958's first 24 weeks and a record profit of $14.9 million, up more than 7% over last year. In electronics, International Business Machines reported first-half sales in the U.S. of $564.6 million (up 19%) and earnings of $50.6 million (up 20%), both new records.

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