Cash on the Line

As profit margins dwindled this year, investors awaited dividend meetings with forebodings of bad news. Last week they got a pleasant surprise from some of the industries hardest hit-by the recession--steel, autos and other consumer durables. Two of the U.S.'s biggest steel companies voted to maintain their dividends, even though first-quarter earnings were below the dividend rates. Bethlehem Steel reported first-quarter earnings of 52-c- a share, but voted to continue paying the 60-c- dividend, drawing on reserves, said

President A. B. Homer, as "some indication of our confidence in the future." Jones & Laughlin Steel continued its 62 1/2-c- dividend, though its first-quarter earnings plummeted to 17-c-, v. $1.89 last year.

The cheering note for J. & L. President Avery C. Adams, along with other steelmakers, is that the hundreds of millions of dollars which they have poured into new plants and equipment are beginning to pay off in greater efficiency. Adams told stockholders that J. & L. can soon break even when operating at only 44% of capacity. Operating at only 50% of capacity, J. & L. could make $1.35-a-share profit.

In the ailing auto industry, the Chrysler dividend was a casualty. President Lester Lum Colbert reported a first-quarter loss of $15,139,802, almost $2 a share, and reluctantly announced a cut in the dividend from 75-c- to 25-c- to conserve cash. Ford did much better, though its earnings dropped from $1.85 in the first quarter of last year to 42-c- in the first quarter of this year. Nevertheless, it will pay its next quarterly dividend of 60-c-.

While there was some trimming of dividends in other industries, along with some boosts, there was also many a company that continued the same dividend, even though not earned. Sylvania Electric, expecting increased defense business and a gradual improvement in consumer lines, held its 50-c- dividend, v. earnings of 30-c-. Carrier Corp. cheerily declared its 60-c- dividend, even though in the seasonally slow first quarter, earnings were only 10-c-.

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