Motion Picture Herald (Jan-Feb 1945)

BOOM FILM YEAR REFLECTED IN MAJOR COMPANY LEDGERS Valuation of Film Stocks in War Years 1944 Produced Fifty Million More in Revenue Than in Previous Year Motion picture companies entered the new year with increased grosses, earnings, dividends and profits, reduced indebtedness and increased stock value. Although it is too early for official figures on all except the advance in stock valuations, responsible sources estimate that the past year produced approximately $50,000,000 more in film company revenue than the preceding 12 months. An indication of the trend is noted in the improvement of income by Twentieth CenturyFox Film Corporation, whose 1944 gross is estimated at $165,000,000 based on the figure of $132,666,188 for the first nine months, compared with $154,345,949 for 1943. Warner Bros, rose from $131,825,540 in 1943 to an estimated $140,000,000 for 1944. Universal's year-end figure is expected to be up about $4,000,000 from its $46,527,527 of 1943. Paramount's estimated $160,000,000 compares with $140,916,337 for the previous year. It is expected that the final figures for Loew's, Inc., will exceed substantially its income of 1943. $83,000,000 Is Expected For Year in RKO Report Radio-Keith-Orpheum, of which RKO Radio Pictures is a subsidiary, expects official fullyear statements to disclose an income of about $83,000,000 compared with $78,795,320 for 1943. Other companies reported somewhat the same degree of improvement. In the profit department. Paramount reported a net after taxes of $12,476,000 for the nine months ended September 30, 1944, compared with $11,655,000 for the same period in 1943. The final quarter was expected to bring this up to nearly $16,000,000. Paramount paid a total of $1.80 on the common and put it on a $2 annual basis, compared with $1.60 the previous year when it was pegged at $1.80 on an annual basis. The last official report of Loew's, Inc., of which MGM is a subsidiary, disclosed a net of $10,514,464 for the 40-week period ended June 8, 1944, as against $9,453,838 for the comparable period of the previous year. This represented earnings of $6.24 a share on the common compared with $5.67 for the 1943 period. Final figures were expected to maintain the trend. With an official net of $5,048,951 for the first nine months, the final profit for Warner Bros, was estimated at $7,000,000 for the year after provision for some $20,000,000 for taxes. Warners Retired Preferred Stock Early in 1944 The first nine months of 1943 returned a net of $5,714,392, although in that period the company provided $850,000 for unrealized losses on fixed assets and loss of estimated tax benefits resulting therefrom. The official net for the nine months was equivalent to $1.36 per share of common, compared with the previous figure of $1.46 per share after provision for dividends on the preferred then outstanding. The company retired its preferred early in 1944. The gross income for the nine months, after eliminating intercompany transactions, MOTION PICTURE HERALD, JANUARY 6, 1945 1 940 1941 1942 1945 1944 |l,000,000,OOC 900,000,00c 800,000,00( ) 700,000,000 (700,000,00c 500,000,00< ) 400,000,000 How motion picture shares varied in total value at the close of each of seven years oa the New ITork Stock Exchange is shown above. The graph is based on the total outstanding shares of the following stocks: Columbia Pictures, Columbia Pictures pfd.. Consolidated Film, Consolidated Film pfd., Eastman Kodak, Eastman Kodak pfd., General Precision, Loew's, Inc., Paramount, Radio-Keith-Orpheum, Radio-Keith-Orpheum pfd., 20th Century-Fox, 20th Century-Fox pfd. 20th Century-Fox pr pfd, and Warner Bros. was $105,839,366, compared with the previous period's $97,518,625. The Twentieth Century-Fox consolidated net was $9,487,929 for the 39 weeks ended September 23, 1944, compared with $7,187,098 for the 1943 period, which did not include National Theatres and the Roxy Theatre in New York. The 1944 period earned $4.67 per share against $3.49 in 1943. Universal Pictures Corporation reported a net profit of $2,413,507 for the first three quarters of 1944 compared with $2,771,338 for the first nine months of 1943. The common now is on a quarterly basis of 50 cents, making $2 for the year against $1 paid in 1943. The final quarter was expected to continue the trend, with the year's figures revealing slightly less net before taxes and a more sharp decline after taxes, compared with the previous year. The net, after taxes, for the full year of 1943 was $3,759,968. Debt Reduction Aids Paramount Position Debt reduction and changes in debt character were designed to strengthen company financial positions. Paramount retired the last funded debt issue of a subsidiary, the three per cent loan certificates, due in 1955, of Paramount-Broadway Corporation, which were removed from listing on the New York Stock Exchange during the year, cleaning the stock exchange slate of all film issues in the bond section. The company went into the money market in October, borrowing $6,000,000 from three New York banks and advancing funds to Paramount-Broadway to pay ofl $5,542,500 of the three per cent certificates which had been called for retirement. The new funds were obtained by Paramount by reinstating $6,000,000 of an original loan of $15,000,000 made in July to retire the company's 3j4 per cent debentures and which had been reduced to about $8,000,000. Two other Paramount subsidiaries, the Granada Corpora tion and the Mai'bro Corporation, also called in their outstanding bonds for retirement from working funds of both the subsidiaries and the parent company. The debt of Warner Bros, now stands at about $45,000,000 against a one-time high of close to $110,000,000. Actual reduction in the past year was nominal, following sharp cuts made previously, but the policy of renegotiating loans at lower interest rates was continued. Universal's debt position was practically unchanged. Bank loans of $5,300,000 and debentures of $2,000,000 were replaced by 15-year debentures at 3^ per cent. Radio-Keith-Orpheum cut its debt by approximately $3,000,000, leaving the total below $17,000,000. No dividend was declared on the common, but arrears of about $23 on the preferred were cleared up during the year. Rising to their highest levels in several years, the 15 motion picture share issues curiently listed on the New York Stock Exchange advanced more than $127,000,000 in market value during 1944 as the result of an active demand stimulated as much by improving financial conditions within thr industry as by a rise in the general stock list. Total Market Valuation Put at $919,214,486 Total market valuation of the film issues stood at $919,214,486 at the end of 1944, compared with $791,692,747 at the end of 1943 and $604,811,114 on Dec. 31, 1942. While the motion picture stocks kept pace with a market value rise of some $11,000,000,000 in the general list of industrial, railroad and utility shares, they also reflected developments affecting the financial structures of some of the leading units in the film industry. Paramount stock was one of the major gainers, advancing $13,562,598 in market value during 1944 to a total of $72,128,364, compared with $58,565,766 at the end of 1943. Loew's, Inc., whose stock had an outstand (Continued on following page) 13