Weekly television digest (Jan-Dec 1960)

20 • • • • MAY 9, 1960 SALES & PROFITS CONTINUE RISE: Electronics companies continued to improve their fi nancial position in first-quarter 1960, albeit at a slower pace than in 1959. That's evident from our quarterly compilation of sales & profits of "weathervane" firms in the industry, culled from reports in our finance section. The 25 companies selected for our first-quarter tabulation aggregated a 10.8% increase in after-tax profits on 5.8% higher sales, compared with first-quarter 1959. This rise is noteworthy when you consider that ovu: electronics financial index of substantially the same companies showed increases of 23.3% in profit and 12.4% in sales in first-quarter 1959 over first-quarter 1958 (Vol. 15:20 pi). It's also interesting to note that the first-quarter1960 profit increase in electronics is favorable when compared with the Wall Street Journal's recent all-industry compilation showing that 389 firms aggregated 6.6% 1960-over1959 rise for first quarter. That many companies are not sustaining 1959's pyramiding pace in 1960 is demonstrated by the number of firms showing decreases compared vath first-quarter 1959. In sales, 6 of the 25 (24%) failed to match their 1959 performance, while 5 (20%) reported profits lower than in first-quarter 1959 — although in most cases, declines were quite small. On the other hand, none of the weathervane firms reported a net loss for the first quarter. We've subdivided our 25 index companies into 4 categories — fields in which they are best known — for the sake of classification, although almost all of them are diversified and overlap into other groups. We found that the semiconductor-tube group showed the biggest sales & profit increases (largely because of the big jump taken by Texas Instruments), the components group the 2nd biggest. Smallest increases, as usual, were posted by the large, extremely diversified companies. For the first time since we began our quarterly financial surveys more than a year ago, profits increased at a lower rate than sales in 3 categories — consumer electronics, components & semiconductortube. During all of 1959, as our annual-report tabulation showed (Vol. 16:11 pi 7), net profits in all categories rose at a far higher rate than sales. • • • • Here are the aggregate results of the 25 representative electronics firms for first-quarter 1960 compared with the same 1959 period, by groups: The 9 companies primarily known as consumer electronics firms increased their profits a total of 8.3% on 13.8% higher sales. Seven of the 9 reported both sales & profit increases during the 1960 period. The firms in this group are Admiral, Arvin, Hoffman, Magnavox, Motorola, Packard Bell, Philco, Siegler, Zenith. In the components group the 8 firms aggregated 10.8% more net earnings than last year, while sales went up 14.1%. Three of the 8 showed lower sales than in 1959's first quarter, while 2 reported profit declines. The companies in this classification are Globe-Union, International Resistance, P. R. Mallory, Muter Co., Oak, Radio Condenser, Speer Carbon, Standard Coil. Three companies in the semiconductor & tube group noted profit increases of 25.4% on 26.7% more sales, all of them showing both sales & profit increases from the year-ago period. They are General Transistor, Texas Instruments and Tung-Sol. ' In the group of large diversified firms, net profits went up 8% while sales inched 2% higher. One of the 4 firms failed to meet its 1959 record in the first-quarter1960 sales & net earnings. The companies; GE, GT&E RCA, Westinghouse. This table summarizes the first-quarter 1960 operating results of the 25 weathervane firms in terms of percentage increase over first-quarter 1959: