Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-09-21
SMALLER PROFITS
REPORTS EXPECTED
Wall Street Looks for Deep
Cuts in Earnings of
Corporations.
by PRESTON S. KRECKER.

NEW YORK, September 20.-Day-to-
day statistical evidence has prepared
Wall Street for a series of poor earn
ings statements by corporations cover
ing third-quarter operations. There is
little doubt that the business depres-
sion sounded new depths during that
period which will be reflected in profit
accounts.
Analysts estimate that industrial pro-
duction so far this year has run about
18 to 20 per cent below that of a year
ago. while corporation profits have de-
creased from Is to 20 per cent. How
ever, the cloud has a silver lining in
the well sustained dividend payments
by corporations.
Some Firms Show Gain.
The decline in business and in profits,
moreover, has not been unanimous. 1t
was refreshing to have the manage
ment of the Diamond Shoe Co., operat-
ing a chain of more than 90 stores, an
nounce that its business has been run
ming ahead of that of year ago, and
that the company had increased the
dividend rate. The number of cor
porations which are in a similarly happy
position is perhaps larger than one
would think.
A compilation of earnings reports so
far issued this year shows that 241 cor
porations have reported increases over
last year, which admittedly was the
most prosperous period in the Nations
history up to the middle of the Sum-
mer. In other words, comparisons are
being made with operating results prior
to the decline which set in last July.
The number of companies which showed
diminished earnings was, to be sure,
substantially larger. It totals 493, or
about twice the total showing increases.
The ratio of ! to Is not a bad one,
however. and tends to prove that con-
ditionS have not been uniformly bad.
The record of corporation dividends
is even better than that of earnings.
On the whole, strange as it may seem,
stockholders of corporations have drawn
down materially larger incomes from
their investments so far this year than
they did during the corresponding 1923
period. and that despite the fact that
1929 dividends totals registered new
high record.
Out of 1919 corporations, Of which
statistical records have been kept only
100, or less than 10 per cent, have cut
their dividends, while SIS have In
creased them and 1,055 companies nave
made no change. Still more impressive
is the statistical evidence on aggregate
amounts paid. The figures show that
every month this year so far the total
amount of cash distributions by cor
porations was larger than that during
the corresponding period of last year.
Dividend Declarations.
Altogether corporation dividend dec
larations from January to August, m
elusive, are placed at 1892, 719,573. IN
the corresponding nine months OF last
wear the total was $751;, 35T,607. Inc
gain for the 1880 period, therefore, has
been 1915, 1861 1856.
The fact that dividend disbursements
have exceeded those of last year to date
is partly due to increased payments by g.
limited number of corporations, but the
principal explanation is that many COM
panies have increased the volume OF
shares outstanding, through split-upS or
stock dividends, and have either main
tanned former dividend rates on IN
creased shares or paid more than the
equivalent amount on the increased cap
italization.
That corporations could make such a
dividend record in depression year Is
a tribute to the financial strength of in
dustrial organizations, especially the
large units, which accumulated large
back-logs of cash SURPRISES and there
fore can afford to maintain rates OF
payment even during a period of rela-
lively low current earnings. Policies
have been to maintain dividends
wherever that could be safely done in
order to alleviate the effects of the busi-
ness decline.