Television digest with electronic reports (Jan-Dec 1959)

14 Financial Reports; CONTINUING SHIFT of RCA “from a business oriented primarily toward entertainment to a richly diversified one in which defense and industrial products are taking on mounting importance” is reflected in chairman David Sarnoff’s year-end statement Dec. 31, in which he observes that “since 1950 the non-entertainment aspects of RCA’s business have risen by more than 200%.” Thus, sales to the Govt, in 1958 totaled some $300,000,000, up 14% from 1957 and accounting for nearly 26% of its total volume. Shipments to Govt, reached nearly $100,000,000 in 4th quarter, backlog of govt, orders at year-end is about $300,000,000. Increased 4th quarter sales, said Gen. Sarnoff, gave RCA an annual volume approximating the record $1,176,000,000 achieved in 1957. But profits will total about $2 per share vs. $2.55 in 1957. That would indicate 4th quarter sales around $341,000,000 vs. $322,000,000 in 1957’s 4th quarter, profit about 75^ per share vs. 68<f. (For report on first 3 quarters, see Vol. 14:43.) RCA’s role in electronics is the basic theme of Gen. Sarnoff’s year-end statement, which usually has called the turn on new developments, notably in entertainment electronics. This time, he discloses that RCA is studying possible uses for special-purpose satellites, including an “orbital postoffice” to speed mail delivery anywhere in the world. Currently, under pres. John L. Burns, company is expanding and realigning manufacturing facilities and “streamlining and strengthening its corporate structure.” Twelve new units were created last year, said Gen. Sarnoff, “to move decisively into areas of greatest potential growth, such as missiles, satellites and space vehicles, automation, electronic data processing and atomic energy.” As for electronics in the home, Gen. Sarnoff stresses “sustained growth of color TV . . . the growing public acceptance was reflected in a significant increase in sales, despite the industry-wide softening of black-&-white TV sales.” Its subsidiary NBC-TV, he stated, “again led all networks in number of sponsors.” Its gross times sales in 1958 exceeded 1957 by 11%, more than double volume of 5 years ago. Toward end of 1958, NBC Radio, he stated, had 48% of all measured network radio sponsored time, with commercial radio up 20%. Motorola 4th quarter results will push 1958 sales over $200,000,000 and earnings above $3 per share vs. $226,361,190 & $4.04 in 1957, pres. Robert W. Galvin reported this week. Confirming earlier prediction of improvement in final period (Vol. 14:44), he told Wall St. Journal 4th quarter sales would be “substantially higher” than $90,000,000 in same 1957 period, net “well in excess” of $1.50 vs. $1.28 year earlier. He attributed upswing to “better discipline of the production, sales & inventory problem,” said TV set sales in Oct. were 15% ahead of Oct. 1957 and stereo phono sales are far exceeding expectations. Company is “targeting for a better sales record in the 1959 first quarter,” he said. Amphenol-Borg merger into Amphenol-Borg Electronics Corp. (Vol. 14:50) was approved this week by Amphenol stockholders at meeting in Chicago, where new company was set up immediately. Amphenol pres. Arthur .1. Schmitt is chairman-pres. of Ainphenol-Borg; George W. Borg, exec, committee chairman. Ampex (’orp., now tiaded over-the-counter, has applied for listing on N. Y. Stock Exchange. Magnavox directors at N. Y. meeting this week voted to call for Feb. 5 redemption all 4%% convertible preferred stock at $52 per share plus 33^-per-share accrued dividends, after which Ft. Wayne TV-radio-phono manufacturer will have only one class of stock outstanding. Until Feb. 2, preferred may be converted at rate of 1.456 shares of common for each share of preferred — Blyth & Co. agreeing on stand-by basis to buy at $53 per share (less transfer taxes) any preferred tendered. This week, also. Standard Coil Products announced all its outstanding 5% convertible subordinated debentures due Dec. 1, 1967, amounting to $3,500,000, will be redeemed Feb. 16, removing restrictions on dividends and other corporate actions. Payment at 102% of principal amount & accrued interest will be made at Bankers Trust Co., N. Y. Debentures now are convertible into common stock at $10.50. Emerson Radio earnings in fiscal year ended Oct. 31 were “about 10 times greater” than $138,431 per share) in fiscal 1957, reports pres. Benjamin Abrams. Preliminary estimates indicated final quarter’s net profit was about 50^ per share — 214 times earnings of $397,888 (20<^) in first 39 weeks of fiscal 1958 (Vol. 14:37). Sales in full fiscal year were up 8% from $58,803,069 in 1957, according to Abrams, who predicted 20% increase in TV set sales in current year, along with “exceptionally good” stereo sales. Muntz TV Inc., which moved into profit position in fiscal year ended Aug. 31 following reorganization deficits (Vol. 14:47), reports “marked increase” in results for first new quarter ended Nov. 30. Earnings in period were $129,408 on sales of $1,828,734 vs. $123,615 on $1,426,501 in same quarter year earlier. Backlog was up 75%, according to sales v.p. Jack Simberg. International Resistance Co. is ending year with earnings only “slightly less” than $469,870 (35^( per share) in 1957 despite $1,800,000 drop in 1958 sales from last year’s $15,374,721, pres. Charles Weyl told Wall St. Journal. In 42 weeks to Oct. 19, company earned $309,825 (22^) on $10,642,998 vs. $531,424 (39^) on $12,965,896 in same 1957 period (Vol. 14:47). Admiral Corp., whose stock during 1958 went from low of 7 to year-end closing of 19, has been awarded CAA contract for $5,729,116 for air traffic controls involving TV techniques. Haydu Electronic Products Inc., through Berry & Co., Plainfield, N. J., has completed sale of $300,000 issue of debenture bonds. a Loew’s Inc. management headed by pres. Joseph R. Vogel, threatened with proxy fight by minority stockholders who opposed spinoff of N. Y. radio WMGM and 102 U. S. & Canadian theatres (Vol. 14:44), apparently won assurance of continued control this week. Describing itself as “friend of management,” group led by chairman Nathan Cummings, of Consolidated Foods Corp., Chicago, acquired more than 235,000 shares of Loew’s capital stock, of which about 5,336,000 are outstanding. Sellers were reported — unofficially — to be dissident holders Louis A. Green, Joseph Tomlinson & Jerome A. Newman, and N. Y. investment banking firms Lehman Bros, and Lazard Freres & Co. Correction: Standard Coil Products earnings for 1958 will run about 60^^' a share, up from 55^' in 1957, total sales running more than $67,000,000, up about $6,000,000. We regret error in Vol. 14:52. Charles Edison, ex-Gov. of New Jersey and son of the famous inventor, has resigned from board of ITT.