Television digest with electronics reports (Jan-Dec 1957)

13 Financial & Trade Notes: ABC division of American Broadcasting-Paramount Theatres increased gross income in 1956 to $98,759,306, from $81,116,634 in 1955, but fell below expectations in fourth-quarter TV network sales, according to annual report released this week. No breakdown was given for TV revenues alone. AB-PT pres. Leonard H. Goldenson noted that returns for final quarter last year were below those in similar 1955 period, singling out failure of Mickey Mouse Club to win full sponsorship. “While efforts are being continued to improve TV sales during the current broadcast season, a materially broadened and straightened program schedule is being set for the 1957-1958 season,” Goldenson told stockholders. Consolidated AB-PT .report showed over-all 1956 earnings of $8,476,716 ($1.96 per common share) compared with $8,373,000 ($1.93) in previous year. Of total net income last year, $7,734,545 ($1.78) came from operating earnings, $742,171 (18^) from capital gains. This compared with $8,218,017 ($1.89) in operating earnings and $155,356 (4<f) in capital gains in 1955. Gi’oss AB-PT income was at new high — up $198,350,068 to $206,915,705 from 1955. “To implement the development of the ABC program sti’ucture,” Goldenson said, “a plan to expand the physical facilities of the TV network is . . . under way. Our company has maintained a strong financial position, with additional funds having been arranged for this year in order to meet all of these requirements. Working capital at the year end was $41,200,000 compared with $30,238,000 in 1955. * Goldenson cited “fine progress” in subsidiaries AmPar Records and ABC Film Syndication, and in other AB-PT interests including Disneyland Park (35%), Wind Tunnel Instrument Co. (25%), Microwave Assoc. Inc. (33%%), Technical Operations Inc. (25%). Movie production by AB-PT Pictures Corp., formed last Nov., “is being undertaken on a limited basis at the outset,” Goldenson said. Theatre income in 1956 was $100,565,000 compared with $110,503,000 in 1956, partly reflecting disposition of 32 properties last year under anti-trust consent decree. AB-PT holds full or part interest in 550 theatres. * >» >K * Hoffman Electronics earnings in first quarter of 1957 will be about 10% ahead of the 64^ per share in first 3 months of 1956, though sales will be down slightly from the $12,100,000 of first quarter year ago, v.p. C. E. Underwood told Wall Street Journal. Earnings increase this year resulted from higher profit per sale on TV receivers. Sales decline, he said, was due to conclusion of TACAN contract for Air Force. He also said that Hoffman has borrowed more than $4,000,000 against some govt, contracts since Jan. 1, expects to clear all short-term loans by July 1. Hoffman financial report for 1956, released this week, detailed earlier report by pres. H. L. Hoffman (Vol. 13:8). Earnings were $1,601,974 ($2.19 per share on 730,295 common shares) on sales of $46,580,279, as against $1,560,596 ($2.15 on 724,760 shares) on $44,416,673 in 1955. RCA’s first-quarter earnings “probably” will approximate the $12,727,000 (85<jf per share) earned in first quarter of 1956, reports Wall Street Journal. No comparison was made with sales of $274,848,000 in first 3 months year ago. RCA’s unit TV sales thus far were said to be keeping pace with 1956, with its factory and distributor inventories under last year. Radio sales were running ahead of 1956 levels, phonos up 25%, hi-fi sales “substantially” above 1956. Sprague Electric reports sharp drop in earnings to $2,176,297 ($1.75 per share) in 1956 from $3,003,128 ($2.42) in 1955. CBS Inc. 1956 report distributed to stockholders this week verifies previously disclosed all-time peaks in consolidated sales and earnings (Vol. 13:5, 7) — but its division reports are especially revealing. Though divisional balance sheets are never shown, it’s no secret that telecasting is CBS’s biggest volume item and CBS-TV (“the largest advertising medium in the world”) increased its advertising revenues by 18.3% while CBS-Radio “continued to be profitable and to lead all competitors.” Columbia Records sales volume rose 50% to new peak, LPs alone increasing by 120% and accounting for “almost 60% of the record industry’s total volume.” Consolidated revenues and sales went up 12.1% to $354,779,843 and, despite contrary industry trends, aftertax profits went up 21.6% to $16,283,462 ($2.17 per share) — an achievement all the more remarkable in light of liquidation of unprofitable CBS-Columbia TV-radio manufacturing div., discontinued in July and representing loss of 41«f per share, and in the face of the undisclosed losses of CBS-Hytron. Yet CBS-Hytron tube and semiconductor business tripled in dollar volume over 1955, tube sales being severely hampered by shrinkage of TV-radio set manufacturing as result of 22 companies quitting field or merging and because “market for color tubes did not develop as expected and a general excess capacity in the industry caused unprofitable price levels.” Yet factory sales of transistors went up tenfold in year and diode sales more than doubled. CBS Laboratories rechanneled its efforts from TVradio receiver work to research for the Air Force in solidstate physics, guided missiles and photographic devices — though in TV it contributed to improved reception with its Highlight Aperture Equalizer for sharpening the transmitted image. (For report on CBS International, see P. 12.) * * ♦ * Sylvania proposes increase in authorized common shares from 4,000,000 to 6,000,000, will also ask stockholders at annual meeting in N. Y. April 30 to approve increase in directors from 10 to 12. Proxy statement noted that only 341,667 shares were outstanding or “reserved for issue” as of March 11, and said there were no plans for issuance of additional shares under authorization. But, it adds, directors believed additional shares “should be available for any corporate purposes, including, but not limited to, the refinancing of outstanding indebtedness and raising of additional capital.” Sylvania last year called off announced plans to raise $25,000,000 by sale of 30-year debentures because of “unsatisfactory conditions in the money market.” Avco’s consolidated earnings for 3 months ended Feb. 28 totaled $3,119,876 (34«S per share) on sales of $83,194,479, compared with $665,300 (7^) on $88,763,084 in corresponding period of preceding fiscal year. Earnings improvement, noted chairman Victor Emanuel, resulted from elimination of unprofitable Crosley-Bendix TV-radio-appliance lines, income tax credit, continued growth of industrial & defense businesses, specialized farm equipment and broadcasting operations. Canadian Weslinghouse earned $1,801,734 in 1966 vs. $1,514,915 in 1965 despite fall-off in TV market, “depressed prices” of electrical equipment and effects of last year’s strike at 30 Westinghouse plants in U. S. which curtailed supplies of components, pres. George L. Wilcox reports. Good year in radio & hi-fi helped set records in orders. RC.\’s V/i% convertible subordinated debentures, being issued in exchange for temporary debentures issued in Dec. 1956, will be available for exchange at Irving Trust Co., 1 Wall St., N. Y. Permanent debentures will have coupons representing interest payments from June 1, 1957 to Dec. 1, 1980, the due date.