Polyethylene Does if
PI
FINANCE
Diversification program boosts Spencer's sales and earnings to record levels
S h a d o w of a Doubt
IN TALLYING RECORD sales and profits
Petroleum stocks have reacted in recent weeks to unsettlina news from at home and a b r o a d THE SHADOW O F SUEZ a n d t i g h t credit
has h u n g darkly over Wall Street in the past two months, causing a definite dampening of investor enthusiasm and a hesitant performance on t h e stock exchanges. You need look no further t h a n petroleum shares to see how foreign affairs affect stock prices, for t h e oil industry probably has more a t stake i n t h e turbulent Arab world than a n y o t h e r segment of American business. Throughout most of this year t h e oils have outperformed t h e over-all market in their u p w a r d trend. But since reaching its high point on July 2 0 , C&EN's index of petroleum stocks h a s dropped over 6 % . The market a s a whole, as measured by t h e SEC composite index, hit its high t w o weeks l a t e r a n d has since dropped only 4%. Some individual petroleum issues, moreover, h a v e fared even worse. Gulf—which gets over half its crude from t h e Near East, most of w h i c h must be shipped through the S u e z Canal—is off nearly 2 0 % from the level reached
INDEX
UfeaLfe
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SEC Composite
4546
C&EN
SEPT.
late in July. Other "international" oils also have been affected. Socony, Standard of California, and Texaco all had declined 10% or more from their July 2 0 level as the first week in September ended. By contrast, a steadier performance has been turned in by stocks of firms (like Indiana Standard, Shell, Atlantic, and S u n ) which rely more on domestic crude production. Suez is not the cause of uncertainty, of course. Possible political changes are an unsettling factor in an election year. Rising costs of borrowing have h a d an impact throughout the economy (C&EN, Sept. 10, p a g e 4 4 0 8 ) . Higher costs from any q u a r t e r can cut into earnings in a competitive market. A n d large amounts of capital are needed for producing a n d refining petroleum products. Witness Sinclair, now considering t h e sale of $165 million worth of debentures to finance t h e expansion of its crude and gas reserves, in part by acquiring other producers.
Index
17. 1 9 5 6
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IVI#\F^r^EiT
for the fiscal year ending June 30, Spencer Chemical credits its diversification program—including entrance into the polyethylene field and completion of facilities for upgrading ammonia to a more varied and marketable line of nitrogen products—for its improved showing (page 4 5 0 8 ) . Spencer's sales volume for the latest year increased 2 6 % above t h e previous year to $45.6 million. Net amounted to $5.9 million ($4.73 a common s h a r e ) , u p from $5.1 million earned t h e year before. Although profit margins were reduced b y lower prices for nitrogen and by a smaller demand from farmers, nitrogen products continued to contribute a major part of sales and profits. Polyethylene volume, however, not only accounted for the increase in sales b u t also more than offset a decline in income from nitrogen product sales. President Kenneth A. Spencer told stockholders in t h e company's recently released annual report that plastic products should be "an increasingly profitable segment of business." Anticipating some years ago that a surplus of nitrogen was developing, the company says it took "constructive steps t o p u t itself in t h e best possible position to operate at a profit during
•«•«•iwSISPfiS
S E C C o m p o s i t e Index
ΡΕ
RIO DIC
CLASSIFICATION
Lithium, by reason of its atomic con figuration and general characteristics, is rightfully included as the first memher of Group I in the Periodic Table. A de tailed study of the properties and reac tions of both the elements and their compounds, however, shows that Lith ium often resembles the metals of Groups II and III more closely than Group I. Following are some characteristic dif ferences: L i t h i u m differs i n o r g a n i c chemistry . . . because its organolithium compounds form a unique class with stability, solu bility and activity characteristics inter mediate between those of the Group I and Group II organometallic compounds. Lithium also differs from the other alkali metals in that it serves as a unique catalyst for the polymerization of diolefins to materials of definite and predict able structure. It directs, for example, the polymerization of isoprene predom
OF
THE
inantly to 1,4 addition structures. Again, recent investigations have in dicated an interesting potential as a direct reducing agent in solvents such as ammonia, low molecular weight amines, and ethylenediamine.
L i t h i u m differs i n m e t a l l u r g y . . . inasmuch as the affinity of Lithium for oxygen, for example, is being utilized to reduce porosity in copper and copper alloy castings. Recent research has re vealed that Lithium will produce brazing alloys with self-fluxing properties and in crease the wetting ability of these alloys.
L i t h i u m differs i n i n o r g a n i c chemistry . . . the usefulness of Lithium Hydride and Lithium Aluminum Hydride in the prep aration of other hydrides having already been widely demonstrated. Recent studies indicate that other complex hy drides prepared in a similar manner may
ELEMENTS
prove to be interesting tools for research. The low dissociation pressure of Lithium Hydride at its melting point, to cite a specific example, is unique among all hydrides. LiH also has some slight solu bility in polar organic compounds which is again unique among alkali metals.
L i t h i u m differs i n h e a t transfer . . . based on its physical properties it has no equal as a liquid metal coolant. Due t o corrosion caused at elevated temper atures by impurities in commercially available Lithium and Lithium Metal, Lithium has thus far found only ex perimental use. Why don't you take a long look at Lithium? Its uniquely valuable differ ences in so many diverse fields may prove of great interest—and profit—to you. Write our PR&D department giv ing us details of the application you have in mind. Experimental quantities of Lith ium Compounds are available on request.
. . t r e n d s ahead in industrial
^ LITHIUM CORPORATION Ψ\ OF AMERICA, INC A \
2515 RAND TOWER MINNEAPOLIS 2, M I N N .
MINES: Keystone, Custer, Hill City, South Dakota · Bessemer City. North Carolina · Cat Lake, Manitoba · Amos Area. Quebec · BRANCH SALES OFFICES: New York Pittsburgh · Chicago · CHEMICAL PLANTS: St. Louis Park, Minnesota · Bessemer City, North Carolina · RESEARCH LAS ORATORY: St. Louis Park. Minnesota
SEPT.
17,
1956
C&EN
4547
FINANCE With current assets a t the end of this period." Storage facilities to per mit maximum production during off- June amounting to $31.4 million (in peak seasons and an aggressive sales cluding $22.5 million i n cash a n d program, it adds, have given it a strong government securities alone) a n d cur position i n t h e highly competitive rent liabilities of only $9.6 million, the company h a s a strong working industry. • Money f o r Expansion· In t h e capital position. It is keeping enough past year Spencer spent $3.6 million capital on hand not only to meet cur on capital additions, including ex rent business needs b u t also to finance panded nitric acid a n d nitrogen solu new projects now being explored, tion facilities at Vicksburg, Miss., and Spencer reports to stockholders. Last year $1.9 million went into a carbon dioxide plant purchased a t Fort Worth, Tex. It is increasing the technical and research activities; this capacity of its Chicago formaldehyde year's budget boosts such expenditures to $2.1 million. plant 30% this year.
Λ.=
s p e c i f y
Gulf
Toluene for your chemical s y n t h e s i s ^ ^ ^ , ^ · ^ - , ^ ^ ^ ,
Need toluene o f extremely high purity for chemical synthesis? Gulf has it! Gulf's extra high quality toluene is available for immediate shipment in tank car and barge quantities. Let us quote on your requirements,
"Qualify Chemicals from Petroleum" WE IN.VITE Y O U R-l Ν Q U-l RI -ES—-WRI-I-TE W I - R E - O R - P H O Ν Ε-
PETROCHEMICALS DEPARTMENT GULF OIL CORPORATION P.O. BOX 1166, PITTSBURGH 30, PA.
4548
C&^N
SEPT. 17,
19 56
upfimism at v-c Despite a five-year downward trend in earnings, Virginia-Carolina '~ *emical's new management is "fu men tally optimistic," sees a better *ings performance in the upcoming y and d i e years ahead, according to acting president William C. Franklin. Frank lin is a member of the group which took over control of V-C when a bitter proxy battle ended July 18 with the group's electing seven members to the 11-man board of directors. For t h e fiscal year ending J u n e 30 Virginia-Carolina's sales dropped to $70.2 million, off from $77.5 million a year earlier a n d lowest level since 1950. N e t income of $1.4 million was d o w n 4 3 % from fiscal 1955 to a post w a r low. Profits equaled $6.47 per share of preferred stock, on which ac cumulated unpaid dividends now add u p to $73.50. During the latest year, decreased sales of mixed fertilizer and of fibers m o r e than offset greater d e m a n d for phosphate rock and t h e products of V-C's chemical division. Since t h e n e w board gained control, the company says, certain changes have been made in order t o bring about economies and improvements are under study.
• Nuclear
Instrument
and
Chemical
p a i d its first dividend—10% in s t o c k to shareholders on Sept. 15. Three straight years of increased sales and profit have built up Nuclear's cash position. Although tlie company, now in its eleventh year, has enough cash to make a cash p a y m e n t to stockholders a n d still have ample left for normal op erations, says president Ε. Β. Tilton, it prefers t o conserve its funds for re search a n d expansion. • M a r a t h o n ' s sales for the first nine months of its current fiscal year were $109.2 million, an increase of 1 4 % from t h e like period of a year ago. Earn ings, on the other hand, declined from $6.5 million last year t o $6.1 million in the latest nine-month period. N e t for the most recent quarter, ending July 3 1 , dipped to 6 6 cents a share, com pared with 7 1 cents a share earned in t h e corresponding 1955 quarter, al though volume i n t h e period w a s u p 1 1 % to $38.8 million. Earnings were not as high as expected, president John Stevens, Jr., states, because increases in sales prices have n o t yet fully com pensated for higher costs for materials a n d labor. I n addition, sales volume was less than expected, so that produc tion has exceeded shipments a n d in ventories of finished goods are u p .
