Higher Sales Boosted Chemical Industry

COMPANY Net Sales (millions)

Change from 1961

Net Income

(millions)

Change from 1961

Earnings/ Share

1962 1961

Profits, % of Sales

1962 1961

CHEMICALS Allied Chemical $ 869.1 + 3.2% $ 58.0 - 6.0% $2.19 $2.33 6.7% 7.3%

American Cyanamid 649.2 + 7.5 59.3 + 20.0 2.77 2.31 9.1 8.2

American Enka 137.5 +20.0 8.5 + 45.2 6.47 4.46 6.2 7.6

American Potash 46.8 + 1.9 4.2 - 12.9 1.74 2.01 8.9 10.4

Atlas Chemical 85.5 + 4.5 2.7 - 24.8 0.74 1.06 3.2 4.5

Celanese 317.1 +12.0 27.5 + 28.4 3.00 2.11 8.7 7.2

Chemetron Corp. 149.2 + 4 . 1 4.8 - 3.4 1.56 1.64 3.2 3.4

Commercial Solvents 65.6 + 2.7 5.9" + 6.6 2.01n 1.88 9.0 8.6

DeSoto Chemical 58.1 +13.6 2.9 + 8.5 0.84 0.77 5.1 5.3

FMC Corp. 506.56 +22.2 26.1 + 11.3 1.81 1.63 5.2 5.7

Foote Mineral 18.0 +12.1 0.6 + 81.4 0.43 0.24 3.1 1.9

Heyden Newport 64.3 + 6.6 2.7 + 9.0 1.11 1.01 4.2 4.0

Jefferson Lake Sulphur 1.0 + 2.0 1.23 1.20 10.9

Mallinckrodt 37.5 +10.3 0.9 + 44.0 2.03 1.94 2.3 2.4

Matheson 8.5 +19.3 0.8 + 37.8 1.29 0.94 9.7 8.4

Michigan Chemical 10.4 + 4.9 0.5 0.71 (0.38)c 5.3 ... Minnesota Mining 687.1 +12.0 83.7 + 11.3 1.61 1.45 12.2 12.3

Nalco Chemical 55.1 + 6.7 4.9 + 2.7 2.02 1.97 9.0 9.3

National Lead 570.7 + 2.7 49.0 - 5.2 4.01 4.24 8.6 9.3

National Starch 70.6 + 8.3 4.4 + 8.9 1.97 1.82 6.2 6.1

Nixon-Baldwin Chemicals 10.1 +27.3 0.3 + 85.6 0.51 0.28 3.3 ... Olin Mathieson 729.7 + 4.1 34.1 + 6.5 2.63 2.47 4.7 4.6

Pan American Sulphur ... 3.1 + 27.3 1.33 1.05 ... ... Pittsburgh Coke 45.7 -12.2 1.4 +414.1 0.79 (0.14)c 2.9 0.5

Pittsburgh Plate Glass 656.7 + 8.9 43.0 + 24.2 4.05 3.23 6.5 5.7

Richardson Co. 39.0 +19.0 1.5 + 20.0 2.32 1.91 3.8 3.8

Rohm & Haas 261.0 +10.1 24.4 + 22.0 5.00 4.09 9.4 8.8

Southern Nitrogen 19.8 +41.4 1.7d 1.31 8.6 15.4

Stein-Hall 68.3 +15.4 1.5 + 52.9 1.92 1.33 2.3 1.7

Texas Gulf Sulphur 59.0 < 1 12.1 - 3.5 1.21 1.26 20.6 21.3

Union Carbide 1,630.7 + 4.3 159.8 + 12.3 5.31 4.73 9.8 9.1

Virginia Chemicals 13.2 + 5.2 0.6e - 3.5 0.93* 0.97 4.9 5.4

Vulcan Materials 117.2 - < 1 7.5 + 8.3 1.16 1.02 6.4 5.9

PHARMACEUTICALS Baxter Labs 42.3 +12.7 2.9 + 12.9 1.00 0.89 6.7 6.7

Mead Johnson 120.6 -17.0 4.4 - 54.0 0.77 1.71 3.7 6.6

Merck 240.5 + 5.2 29.2 + 7.6 2.70 2.51 12.2 11.9

Miles Labs 97.4 + 7.0 5.4 + 1.2 1.33 1.37 5.6 6.0

Parke-Davis 181.7 - 1.4 19.1 - 14.6 1.28 1.50 10.5 12.1

Pfizer 383.6 +15.4 36.5 + 11.7 1.93 1.75 9.5 10.1

Searle 56.6 +26.5 13.8 + 38.7 3.12 2.25 24.4 22.2

Schering 91.9 + 5.5 10.2 + 2.1 2.48 2.40 11.2 11.5 Upjohn 173.2 + 2.3 23.3 + 2.2 1.64 1.60 13.4 13.8 Warner-Lambert 305.4 +10.0 28.6 + 6.3 1.20 1.12 9.4 8.5

« Before special charge. b Gross income, c Deficit, d Pretax earnings, o After a nonrecurring loss of $94,200.

26 C & E N M A R C H 18( 1963

1962 Profits But sales increases probably will have less impact on 1963 profits

A final rundown of last year's sales and earnings figures confirms the pat­tern set by the first handful of reports (C&EN, Feb. 4, page 21) : With only a few exceptions, chemical and drug companies rang up good gains in 1962.

Higher sales—and the resulting higher operating rates of production facilities—also helped to firm up profit margins. Here, though, the picture is less clear-cut. Although the majority of major companies managed to carry a larger share of each sales dollar through to net income, for others profits were squeezed a bit tighter again last year.

Cloudy Outlook. Last year's results, too, are less than clear-cut insofar as they may be clues for 1963's sales and earnings record. Chemical companies' fourth-quarter earnings averaged about 8% higher than a year earlier. Allied Chemical had the best fourth quarter in its history, with profits up about 19%, even though it was one of the few companies that turned in lower earnings for the year as a whole. But the new 7% investment credit on federal income taxes helped improve some firms' fourth-quarter earnings. And, even so, several companies, such as Olin Mathieson, Merck, and Atlas Chemical, earned less in the last quarter of 1962 than in 1961's like period.

Chief credit for last year's over-all excellent earnings results can be laid to higher sales (coupled, in many cases, with the industry's continuing cost-cutting efforts). For all 1962, chemical firms boosted both sales and earnings by about 10%.

With the current trend in business disappointingly flat, though, no one is betting on a similar rise in sales this year. Both last January and last De­cember, sales of chemicals were a mere 1% higher than year-earlier levels, and the industry's sales have held steady for more than a year now.

Thus, barring a last-half upsurge in demand, sales increases are likely to have much less impact on earnings this year. And with prices continuing to drift lower while costs still are on an uptrend, chemical companies will be hard pressed to improve earnings.

Milton R. Dr. John W. Underwood Clegg

New Research Institutes In Houston, Minneapolis

Universities, business­men help new institutes get started

Two new research institutes were getting ready last week to begin oper­ations. In Houston, faculty members at the University of Houston and prominent local businessmen were making plans for a profit-seeking, tax-paying organization to be called the Houston Research Institute. And in Minneapolis, Dr. John W. Clegg, for­merly manager of Battelle Memorial Institute's chemical engineering de­partment, was preparing to take over on April 15 as the president of newly organized, nonprofit North Star Re­search and Development Institute.

HRI Plan. Houston Research Insti­tute is being organized with the help of the University of Houston. The university will own a sixth of the stock of the new institute and lend part of the initial capital. Individuals will own the rest of the stock.

HRI will perform applied research and development and offer services in engineering, scientific design, market­ing, and management.

Serving as the nucleus for HRI will be Prengle, Dukler & Crump, a Hous­ton-based research and engineering organization. HRI will operate from PD&C's building in Houston and will expand it by adding some 15,000 square feet of floor space. PD&C will continue as a wholly-owned subsidiary of Houston Research Institute, as will Techno Service, a firm PD&C acquired in 1962.

Chairman of HRI's board of direc­tors is Milton R. Underwood, presi­dent of the brokerage firm, Under­wood, Neuhaus & Co. Joseph R. Crump, director of research at the uni­versity, is president of HRI and a board member. HRI's board also in­cludes Dr. H. William Prengle and

Dr. A. E. Dukler, professors in the university's department of chemical engineering; Dr. Philip G. Hoffman, president of the university; other uni­versity officials; prominent business­men; and some other former principals of Prengle, Dukler & Crump.

The University of Houston now is the only university formally affiliated with HRI, but the firm expects to use top talent in physical sciences and en­gineering from all nearby educational institutions.

By starting with an established firm, HRI may have a gross volume of $3 to $4 million by 1966 or 1967, accord­ing to Mr. Crump. Prengle, Dukler & Crump's present billings are about $500,000 annually.

PD&C has a fulltime staff of 45. It also employs faculty members of vari­ous educational institutions near Hous­ton as consultants or part-time staff­ers. This practice will be continued by HRI. Dr. Hoffman says this makes faculty posts more attractive to top educators in physical sciences and en­gineering.

North Star. Initially, North Star Research and Development Institute will be located at Archer Daniels Mid­land's former research center in south Minneapolis. It eventually will have two locations—a basic research unit on or near the University of Minnesota campus and an applied research sec­tion at Valley Industrial Park, a 2275-acre tract on the Minnesota River 15 miles southwest of Minneapolis.

Land from Valley Industrial Park is part of the endowment of the insti­tute. Many research-minded com­panies in the Minneapolis-St. Paul area contributed the land and several million dollars to launch the research institute.

Five companies now have a total plant investment of $12 million at the park. They include installations for American Can's glass container di­vision; Owens-Illinois' paper con­tainer division; F. H. Peavey's grain terminal; Air Products & Chemical's oxygen plant; and the Valley Ware­house, Inc., terminal.

The North Star Research and De­velopment Institute will work closely with the University of Minnesota. Dr. O. Meredith Wilson, president of the university, is also chairman of the board for the institute. Like Battelle Memorial Institute and Stanford Re­search Institute, after which it will be patterned, the institute will do con­tract research in many different fields.

M A R C H 18, 1963 C & E N 27