Rites of Spring

Beneath tents and armory roofs, in airplane hangars and convention halls, U.S. industry's managers gathered last week for their annual rites of spring: the yearly stockholders' meeting. When the news was good--as it generally was--sunlight and flute music filled the scene, but when it was bad, there were squalls and sour notes.

Before some 11,000 expectant stockholders, American Telephone & Telegraph President Frederick R. Kappel rose to applause for his fine 1959 and first-quarter 1960 earnings report (TIME, April 18). 1/8But when President Kappel explained what was on his mind, the cheers turned to groans. Contrary to all hopeful' rumors, said Kappel, A.T. & T. was not considering an immediate boost in the $3.30-per-share annual dividend. "The time since the dividend was last increased was very short--one year--and this is not a long enough period to tell us what we need to know about the future, which is very long indeed." A.T. & T. stock, which had hopped to a new high of 96 1/8 the day before, dropped right back down again, slipped 4 5/8 points in a day and closed the week at 89 1/2.

$2.6 Billion Expansion. What started the rumors of a bigger dividend? Nothing more than a hope among Wall Streeters. They reasoned that since A.T. & T. was in the best cash shape in years, it should be able to pass on a boost to stockholders. No such luck. President Kappel said that A.T. & T. needs the cash for expansion. In 1960, said he, A.T. & T. plans to spend $2.6 billion on capital improvements, the largest sum ever.

For the bosses of dozens of other top U.S. companies, the greeting from stockholders depended not so much on additional goodies but on whether profits were up or down. Steelmen beamed as they presented quarterly reports posting new records for sales and earnings. Armco Steel was up to $1.62 per share v. $1.43 in last year's first quarter; Kaiser Steel zoomed from 76-c- to $1.79 per share; both Republic Steel and Granite City Steel were ahead of 1959. As the first of the automakers to report, Ford Motor Co. foretold good news from Detroit with first-quarter earnings of $2.61 per share, up 6% from last year. Chrysler was also doing better, although there were troubles (see next page).

Irate Stockholders. But it was a dark day for Douglas Aircraft's Donald Douglas Sr., who had to suffer through a 2 1/2-hour meeting and shouts of "baloney" after announcing "an extremely disappointing" $6,949,002 loss for the quarter, due mostly to extra-heavy development expenses on the DC-8 jetliner program. At Columbia Broadcasting System, Chairman William S. Paley had an unruly meeting on his hands, with irate stockholders complaining over lower earnings (slightly less than 1959's 87-c- for the first quarter), the payola TV scandals and a handful of other problems. Said Chairman Paley: "We used to look forward to these meetings. Now we anticipate them with dread."

Nevertheless, across the wide spectrum of U.S. industry, the first quarter of 1960 produced a picture of good business. Some first-quarter earnings (per share) :

1960 1959 Chemicals & Drugs E. I. du Pont $2.10 $2.17 Allied Chemical .68 .57 American Cyanamid .78 .62 Parke, Davis .64 .47 Chas. Pfizer .43 .39

Tobaccos R. J. Reynolds 1.15 .97 P. Lorillard .84 .91 Liggett & Myers 1.58 1.71

Nonferrous Metals Kaiser Aluminum .41 .20 Aluminum Co. of America .56 .49 Kennecott Copper 1.65 2.03 National Lead .99 .96

Aircraft & Defense Cessna .79 .70 Martin .13 1.04 Chance Vought .74 1.27 Grumman .82 .48

Miscellaneous American Machine & Foundry .85 .75 Westinghouse Electric .55 .41 Socony Mobil .97 .93 B. F. Goodrich 1. 01 1.15 National Dairy .76 .70 Crown Zellerbach .64 .58 Montgomery Ward 2.28 2.08

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