Television digest with electronics reports (Jan-Dec 1958)

15 RCA Anti-Trust Charge: This week’s criminal anti-trust indictment (see p. 1) — as did Justice Dept.’s 1954 civil complaint (\ol. 10:47) — charges RCA with violations of Sec. 1 & 2 of Sherman Anti-Trust Law. Among principal counts: (1) RCA has “continuing agreement and concert of action” with CE, Westinghouse and AT&T that they shall not compete with RCA in licensing radio patents in U. S.; it has similar agreements with foreign companies; it has agreements with foreign companies not to export radio equipment into each otner’s home territories. (2) RCA has continued its domestic and foreign “package license system”; it entered into “understanding” with GE, Westinghouse and AT&T as well as foreign companies not to license any RCA patents under conditions which would injure RCA’s licensing business. (3) “For the purpose of concealing the existence of the violations of law herein alleged,” RCA is charged with making “agreements or understandings” with foreign patent pools and agents giving them exclusive control over RCA patents outside U. S. (4) RCA used patent royalty income (estimated to total $96,000,000 from 1952 to 1956) “to establish and operate an industrial service laboratory to furnish gratis various services for its licensees and refrained from furnishing such services to others.” RCA gave “broad access to its research facilities” to, and exchanged technical knowhow with, GE, Westinghouse & AT&T and various foreign manufacturers, “and withheld such access from others.” (5) “RCA assisted Hazeltine to secure licensees under the Hazeltine package licenses to enable Hazeltine to continue in the licensing business as an ostensible competitor of RCA.” Named as co-conspirators, besides GE, Westinghouse and AT&T: Western Electric; IT&T; Hazeltine; North American Philips; Philips of Eindhoven, Netherlands; Electrical & Musical Industries Ltd., English Electric Co., English Electric Valve Co. and Marconi’s Wireless Telegraph Co., United Kingdom; Canadian Radio Patents Ltd. and RCA Victor Co., Canada; Telefunken and Siemens & Halske, West Germany; Compagnie Generale de TSF, France; Amalgamated Wireless (Australasia) Ltd., Amalgamated Wireless Valve Co. and Australian Radio Technical Service & Patents Co., Australia. Day before indictment was filed, RCA Chairman Brig. Gen. David Sarnoff, in address to American Bar Assn, convention in Atlanta, protested that “conspicuous achievement in the competitive economy too often becomes suspect” and recommended creation of Federal “Bureau of Economic Intelligence” empowered to “supply expert and impartial analysis of business practices and their economic effects upon industry and public . . . “In most of the other areas of human conduct, people can ascertain with assurance whether something they propose to do is within the bounds of legality,” he said. “Why not in the anti-trust area? Is not business entitled to be protected by the same rationale which protects the public from ex post facto laws?” Dividends: Storer Bestg., 45(‘ on common, 6c on Class “B,” both pay^able March 14 to stockholders of record March 1; .Magnavox, 37(ic March 15 to holders Feb. 25 plus o'< stock April 15 to holders March 21; Hazeltine, 35f March 14 to holders Feb. 28; Time Inc., 75c March 10 to holrlcrs Fob. 24; Meredith I’lib., 15r March 10 to holders Feb. 28; .Machlett, 5c March 15 to holders March 5. Financial Reports; Sylvania earned $12,655,839 ($3.48 per share) on record sales of $342,957,061 last year vs. $14,835,389 ($4.10) on $332,344,159 in 1956, chairman & pres. Don G. Mitchell attributing lower income to higher manufacturing and research & development costs, “unusually intensive price competition in some of our more profitable lines.” In letter to stockholders in advance of full annual report, due in March, Mitchell said 1957 sales volume represented 7% gain in Sylvania’s commercial business, 9% decrease in defense billings — “due principally to the completion of certain production contracts.” Backlog of unfilled defense contracts now is “sharply ahead” of year ago, he added. At same time this week, Sylvania filed SEC registrations for 2 issues of long-term debentures: $20,000,000 senior debentures due in 1980; $20,000,000 convertible subordinated debentures due in 1983. Underwriters are Paine, Webber, Jackson & Curtis and Halsey, Stuart & Co.; offerings are tentatively scheduled for March 10, would pay off 3-year bank loans due Jan. 31, 1960, provide additional working capital. Emerson Radio’s first 1958 fiscal quarter ended Feb. 2 looks “much better than last year,” when it showed net of $196,509 (10^ per share), according to pres. Benjamin Abrams’ report to annual meeting Feb. 19. He added only that dividends will resume “as soon as the company is in a position to make money.” For fiscal 1957, which ended last Oct. 31, Emerson earned $138,431 (!<;) on sales of $54,803,069, which compared with $84,852 (4«;) on sales of $73,882,029 in fiscal 1956 and $2,468,063 ($1.28) on $87,383,028 in 1955. Last dividend was IVc stock in Aug. 1956, previous to which quarterly dividends usually were 10(J plus 5c extras. Storer Broadcasting Co. earned 1957 net of $6,396,164 ($2.58 per share) on 2,474,750 shares of common and Class B stock outstanding as of Dec. 31 vs. $5,517,206 ($2.23) in 1956, according to report released Feb. 19 preliminary to annual report which will also disclose revenues. The 1957 profit includes net capital gain of $2,621,496 on sale of stations in Birmingham, Miami & Portland, Ore. during year (Vol. 13:47). Report announced regular quarterly dividend of 45c on common and 6C on B, totaling $2,112,772, with $4,283,392 (66.97'/! of earnings) retained; in preceding year retained earnings were $3,645,886 (66.08''/o). Merger rumors involving Raytheon sprang up last week on the heels of heavy trading in its stock. Company spokesman reiterated to us what pres. Charles Francis Adams told N. Y. Security Analysts Jan. 20: “There is absolutely nothing to any merger reports at this time.” N. Y. Times and Business Week recently noted institutional investors were heavy buyers of Raytheon common at 195758 high of 2414, raked up year-old report that Martin and Lockheed were interested in absorbing Raytheon. Its projected 1958 earnings are about $2.50 compared with $1.70 last year. GE had record earning.s & sales in 1957, preliminary report showing world’s biggest electrical manufacturer netted $247,851,871 ($2.84 per share) on sales of $4,335 billion vs. previous peak income of $213,756,849 ($2.46) on $4.09 billion in 1956. Sales of consumer products (TV sets, refrigerators, toasters, etc.) “declined somewhat” last year from 1956, pres. Ralph .1. Cordiner said, but “strong gains” wore made in clofonso & heavy capital goods items. Sales of industrial components & materials stayed near 1956 levels.