Evening star., 1942-05-17
Equipment
Production 10 Show
Big 1e42Gain
As to 50 Per Cent Rise
Forecast, but Taxes
Cut Eornings
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, May l6.-Shipments
Of the electrical equipment industry
in 1912 are expected to be between
IS and so per cent higher than In
1941, Fitch Investors Service re-
ported today.
New orders, in all probability, will
be considerably in excess of ship
ments, with untitled orders being
added to month by month.
Earnings before taxes will in
crease over 1941, but the Federal
tax rates will be high for 1912, SO
that equity income may be no larger
than in 194l, and in all probability
may be somewhat lower.
Soar 41.9 Per Cent.
"Shipments of electrical equip
ment in the first two months of 1912
were 4l.9 per cent above the cor
responding two months of 1941. This
was a continuation of the ris-
ing trend that has been under way
since January of 1910 and shows no
immediate signs of abatement. Even
should there be no increase above
the current rate, shipments in this
year would register a new record
high.
New orders, or bookings, placed
with the manufacturers OF elec-
trical equipment in the months of
January and February. this year,
were ST. per cent higher than the
total for the similar two months in
1941.
Beginning in June, 1910, new
orders have exceeded shipments in
each subsequent month, with the
former advancing at a faster pace
than the latter. The effect has been
a continuous increase in the back
log of untitled orders which are
currently at the highest level in
the past three years.
Inventories Increase.
There has been a persistent ex-
pansion in work-in-process as a re-
suit of the effort Of managements
to maintain delivery schedules. In
ventories have followed shipments
quite closely. the correlation be-
tween the two elements being quite
close. 1t Is perfectly obvious that
if shipments are to continue to in
crease, then the work -in-process
will have to do likewise. If this did
not happen, it would be necessary
to reduce the amount of shipments
"In an endeavor to conserve stra-
tegic materials and to make avail
able labor and machines, the War
Production Board has issued orders
for the cessation of production Of
electrical appliances and refriger-
ators. Manufacture, generally, is to
cease not later than May 81, 1912.
Such action will not have any ma
teHal effect on the large equipment
companies, as the facilities thus re-
leased will be converted rapidly to
the production of items essential to
Tie elective prosecution OF the war
Earnings Lower.
while billings of all the major
companies comprising the elec-
trical equipment groups were higher
in the first three months of this
year than in the like quarter of
1941, net income in all cases was
variably below that of last year. In
creased taxes were primarily re-
sponsible for the declining trend
with slight rise in labor costs add
ing to the burden.
westinghouse was affected most
seriously, deliveries rising $31 900 900
over 1941 in the March quarter,
while profits declined s1,500,000
Cutler-Hsmmer appeared to resist
the downtrend as net per common
share was $061 in the first quarter
of 1912 and $065 in the like 1941
period The sales of General Elec-
trio in the first quarter of 1912 we're
$61 100000 above the 1941 period.
but net income was 81 ,048, 900 lower.
On per share basis this amounted
to a decline of S003."