Tulsa daily world. [volume] (Tulsa, Indian Territory [Okla.]) 1905-1919, 1917-09-21
COsden Earnings Larqe

Decline in Cosden & Co. stock to
about 80 places the quotation at a
INint where earnings OF around S5
per cent are being shown on its pres
ent market value. After completion
OF the recent financing. where by
$4,000 shares were issued at $40 a
| share, there will be outstanding lit
tie less than Sf6,000,000 common
| stock, about $3,500.000 preferred
stock, and approximately 100000
first mortgage 6 per cent bonds. In
terest charges and preferred stock
dividend require about s935, 900 a
year. The bonds are entitled to the
benefit Of a sinking fund amounting
, to per cent of the amount issued
or 20 per cent of the net earnings of
the company, whichever is larger, but
while this sinking fund is charge
ahead of dividends, its effect is to in
| crease the debt, and no account of II
is. therefore, taken IL estimating the
amount earned on the common stock
Earnings for the first six months
before depreciation and taxes were q
little above $5,000,000. Increased
earnings are anticipated for the sec
ond six months of the present year
due TO the advance in the price OF
mid-continent crude and the compile
| ton of pressure stills, caSinghead
naphtha plants and other additions
and improvements. which are to be
paid out of the proceeds of the recent
| stock issue. Depreciation VIII not be
heavy. as the company's plant is
comparatively new, and the apprecia-
ton on some of its assets will be an
offset. The company owns, for eX-
ample, about 2,400 tank cars, which
cost around s1,40O each. Tank cars
| cost at present more than $4,000
After allowing for the bond interest
and preferred dividend of about
| $685., 900, earnings for the year APP
plicable to the $16,000,000 common
stock should he around $4,000, 900
or more than SO a share on the com
| mo nstock, which is now selling at 50
The weakness in the stock is said
| to be due to the technical position
caused by the fact that stockholders
subscribed for less than half of the
recent offering of $3.50 shares
| leaving the remainder to be taken by
| the underwriting syndicate. Some
short selling is said TO have taken
place in anticipation of a chance TO
cover at a profit from offerings by
syndicate members when the syndi-
cate dissolves.
Cosden & Co. has a large surplus
from earnings returned to the prop
erty and from stock premium &C
! count, the company is said to be in
position to declare stock dividend
at any time the directors see fit. Any
stock dividend would operate to re-
duce the conversion price of the
bonds. and tend to induce conversion
thereby reducing the company debt.
The bonds are at present quoted
around 92 for the Series A bonds and
% for the Series b bonds, the latter
series being convertible into stock on
more favorable terms than the Series
A bonds. therefore commanding a
higher price. At these prices they
yield about 6.S7 per cent for the
Series A bonds and 6.75 per cent for
the Series B bonds. The preferred
stock is selling around So a share to
Weld 7 per cent. Directors of the
company are expected to meet some
time this month and place the com
mon stock on a regular cash dividend
bass.-Wall Street Journal.