Sharpening Up

Nothing makes happier reading for businessmen than profit figures, and the reading has been very good of late. Last week U.S. corporations continued to report new profit highs. Among them: Litton Industries (up 43% for the fiscal year), Procter & Gamble (up 6% for the year), CBS (up 33% for the first half), I.T. & T. (up 13% for the half) and Ampex (up 6% for the quarter).

So far, 37 industrial firms with annual sales of more than $100 million have set new earnings records for the first half. The 713 manufacturing concerns that New York's First National City Bank keeps tabs on showed a fat first-half profit gain of 11 % over last year. With such reports still coming in, little doubt remained that the total earnings of U.S. industry at midyear were running well over the record annual rate of $25.5 billion set in the last three months of 1962.

When economists parcel out credit for the vigorous profit showing, they give generous shares to the high rate of production (industrial production hit a new high in July), the steady buying of consumers and the relatively stable wage rates that have accompanied a period of comparatively peaceful labor relations. But businessmen feel that they themselves deserve more of a pat on the back. RCA President Elmer W.

Engstrom, whose company's profits rose 23% in the first half to a record $29.4 million, puts the profit rise down to management's increasing skill at cost control. After years of operating in a profit squeeze, he says, "industry has learned how to conduct itself under these conditions. It has sharpened its operations, and therefore improved its margins."

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