Independent Exhibitors Film Bulletin (1959)

FINANCIAL BULLETIN JANUARY 5, 1959 By Philip R. Ward 1959: BEWARE THOSE R APSC ALLIONLY MOVIE STOCKS. Close to the last day of 1958 came a development sharply symbolic of the maddening, unintermitting hairbreadthness of our mixed-up industry. While New Year gongs hovered at the ready an announcement was released, which to certain heretofore none-too-giddy celebrants must have been fraught with all the beneficence of an executive pardon. One imagines Joseph Vogel raising his ,stemware in unaccustomed serenity. The simple development was that one Nathan Cummings, Board Chairman of huge Consolidated Foods Corporations had added Loew s 235,000 shares to his grocery larder. Because food baron Cummings is an acknowledged "friend of management", it would appear that proxy buccaneers Green, Newman and Tomlinson are as departed as the old man with the scythe. It would appear, too, that the edifice which many close watchers believed could not weather another crushing assault is finally free to pursue its right and proper business of producing and distributing films without further external annoyance, save those imposed by normal competition. For one reason or another a "Nathan Cummings" — be he flesh and blood or nuts and bolts — appears to be an inevitable concomitant of the movies. For years and years it has been the 'eleventh hour. Somehow the chimes never strike midnight; deliverance just seems to come like an immutable natural law. The movies could teach Mr. Dulles something about brinksmanship. 0 In terms of profits and attendance 1958 was another year at the brink. In terms of manufactured product the industry had already toppled into the abyss. Yet motion picture stocks, those apparent barometers of corporate fitness, were veritable powerhouses of energy. From this may be taken both heart and caution — heart be! cause of the obvious increase in public and Wall Street interest in leading industry firms, caution because of the express nature I of that interest and the price gains which have resulted. Anyone with access to the reports of the industry's public i corporations knows that earnings garnered from all 1958 operations were on the black side but barely. It is a more difficult thing to ascribe profits resulting directly from theatre films. In this sphere there is some suspicion that, Hollywoodwide, this phase of the film companies' operations resulted in loss. The saving dollar grace arose principally from contemporary television film production, film library revenue, nonrecurring realty sales and other one-time barter. 1958 was a gossipy year in stock market counsels and this condition managed to impinge itself upon some share prices in the most misleading way. Let's examine the net 1958 changes in a number of leading companies with special attention given to the dominant factors that may have influenced their stock prices: COLUMBIA '57 close 16 '58 close 203/8 + 4% ("Bridge at River Kwai" produced remarkable income; otherwise the TV subsidiary, Screen Gems, held most significant, constant profits source. Gains mainly operational.) 0 LOEW S '57 close 13<4 '58 close 2U/2 + 81,4 (Proxy combat created stampede for stock; entry of Cummings at year's end heightened demand pressure; however 1st fiscal quarter showed unexpectedly good profit. Gains mainly nonoperational, but this year's rise — and look for it! — will be based on improved business alone.) 0 PARAMOUNT '57 close 5U/4 '58 close 46y4 +15 ("Ten Commandments" played role of father, mother and provider. Cash position excellent. Expertly managed in fiscal sense. Diversified interests give this stock stability. Test will come in '59 without a "Commandments" to bolster film income.) 0 20TH CENTURY-FOX ' 57 close 22 '58 close 4oy4 +I&/4 (TV, oil income augmented strong earnings on product in first half of year. Product solid for year ahead as company shows typical leadership in developing industry's freshest stable of star names. Stock rise for '57 attributable to both operational and non-operational factors, plus pending dollars — high real estate project.) <0 UNIVERSAL '57 close m/t '58 close 2Sl/4 -f 10 (Lip principally on shrewdly engineered sale of studio property to MCA and attendant leaseback. $11 million cash fortifies concern for restoration drive now unfolding. Gain nonoperational.) 0 WARNER BROS. '57 close 17 '58 close 253/8 +83/8 (Stringent economies effected by this organization have resulted in reduced gross income. TV operations have taken up some of slack. Gain here difficult to fathom, but must be attributed to internal and bookkeeping reforms.) 0 UNITED ARTISTS '57 close 15 '58 close 25 +10 (A whopping gain stemming from a fine crop of films studded with more than a fair share of blockbusters. Not burdened with non-productive overhead, this company spends on promotion and reaps a harvest. Gains operational — and growing.) 0 0 The point of caution is this: Profits figure improved for 1959, yet stock prices reside at the loftiest of levels. It is not without prospect that movie shares in specialized instances may actually retreat in what otherwise could be a banner year. o 0 For 1958 as whole, the Film BULLETIN Cinema Aggregate presents this heady wrap-up for your perusal: Film Companies Theatre Companies Close, 1957 112 29Vs Close, 1958 188 373/4 In all, film companies were up 67%! Film BULLETIN January 5, 1959 Page J