BUSINESS &. FINANCE In α S a g g i n g Market This Year . . • S o m e Chemicals
Have
Held Up Better
. . .
%
Price Dec. SI Air Reduction American Potash Commercial Solvents Harshaw Pennsalt Victor Than
Change
1956-57 Low
Recent
Since Dec. SI
Since Low
36 V, 43 16V 2 24 46 26
48 51 17V* 26V2 59 27
—5 —3 0 —2 4-5 4-4
+32 -f-19
67 59V, 34 55 58V2 32 104
-16 -11 -11 -16 -13 -12 -10
4-10 44 43 47 0 43 43
5072 52V·, 17V a 27 56 26
+6
4-10 4-28 44
Others
American Cyanamid Dow Hooker Koppers Minnesota Mining Monsanto Union Carbide
79V 2 67 38 65V, 67 367 = 116
61 D/
33 517* 587a 31 1007.
!
Wall Street Takes a Tumble In a weaker market, prices of many chemical stocks broke this month to lowest levels since 1955 THIS
MONTH Wall Street made t h e
front pages. T h e reason: Stock prices slumped sharply on F e b . 11 a n d t h e day following to t h e lowest level since late 1955. I n t h e parlance of lower Manhattan, stocks broke through a "support level" which h a d held firm for the past 15 months w h e n the DowJones industrial average dropped b e low 4 6 0 . T h e subsequent rally, d e scribed by many as only a "technical re action," brought little cheer t o those who saw it as a temporary rebound after t h e previous selling wave. The slump carried w i t h it an im posing array of chemical shares. Hit ting n e w 1956-57 bottoms were such blue chips a n d growth favorites as Al lied Chemical, Union Carbide, Mon santo, Hooker, a n d Spencer. Prices of most of the other leading chemicals were not much above their lows of t h e past year or more. As a result, millions of dollars have been clipped off inves tors' portfolios. Since t h e start of t h e year, for instance, t h e market h a s chopped more than $350 million off its valuation of all Union Carbide shares outstanding, over $100 million off both American Cyanamid and D o w . 106
C&EN
FEB. 2 5,
1957
• W h y t h e Drop? Market analysts were laying t h e blame in several direc tions at once. One very tangible factor affecting chemical snares h a s been apparent for nearly a year: Competition is increas ing and profits are not keeping u p with rising sales because rising costs a r e pinching margins. Thus, earnings r e ports this year are not nearly so sparkling as a year ago. Earnings in many cases have either declined (Al
1954
lied, Dow, Monsanto, Hercules Pow der) or are ahead b y only a modest amount ( Union Carbide, American Cy anamid, H o o k e r ) . S o many investors have been wondering if the more highly priced chemicals have n o t been evaluated too optimistically—in terms of future growth alone. Tight money, too, is a factor. Yields on bonds have risen t o a point where many investors find a corporate deben ture offering more than 4 % interest a more tempting b u y than a chemical stock like D o w or Minnesota Mining that yields less than 3%. Moreover, a raft of new corporate security issues have been offered in t h e last couple of months to sop u p great quantities of investment money. As one analyst puts it, " T h e market is suffering more from neglect than anything else." And don't forget t h e psychology of the market place. There are just enough clouds on t h e economic a n d international horizon t o sap at investors' confidence. Many market advisors have been flashing caution signals r e cently in their reports, and signs that the boom m a y b e leveling off have caused agonizing reappraisals on t h e part of m a n y stockholders. But underlining t h e cross currents that play through a n y market, some chemicals have turned in relatively steady performances in the face of t h e fall. Some, of course, hit their low point last year and have just clung there. But on t h e other hand, glamor has not completely worn off prospects of expansion and opening of new fields. Acetylene chemistry, as well as in creased demand for industrial gases from busy metal industries, h a s kept interest alive in Air Reduction. Boron has done the same for American Potash and fluorine chemistry for Pennsalt. Another important factor in recent market swings has been investors' evaluations during t h e past year or so. It is largely the market leaders in t h e 1954-55 upswing—those companies whose future earnings were regarded most optimistically—that have been most volatile on the downside, too. •
1955
1956
ONE STOP FOR SODIUM PHOSPHATES
i t pays t o order BLOCKSON phospffat es in m i x e d car or truck loads
You can c o m b i n e any or a l l Blockson chemicals in one car or truckload and receive the carload price on each item. You'll find that this "one stop" purchasing simplifies your s c h e d u l i n g . A collect phone call to Blockson instantly expedites any unforeseen needs.
B L O C K S O N
You'll carry far less inventory, since Blockson can be depended on to vary the flow of Phosphates precisely t o your changing requirements regardless of changing market conditions. For further information, call Blockson or your Blockson distributor.
C H E M I C A L
C O M P A N Y
Division o f Olin Mathieson Chemical Corporation Joliet, Illinois Also major producers of: Hydrofluoric Acid Sodium Silicoffuoride Sulfuric Acid Hygrade Fertilizer Sodium Fluoride Teox 120 Nonionic Surfactant
WAREHOUSE STOCKS AT ALL BLOCKSON DISTRIBUTORS FEB. 2 5,
1957 C&EN
107
NOW... HIGH MOL-WT. Di- and Tribasic Acids
Top: Mol. Wt. -565 Total Carbons -36 Viscous Liquid Bottom : Mol. Wt. 845 Total Carbons 54 Viscous Liquid
Developmental modifications of the com mercial product, Empol 1022 Polymerized Acid, are now available in limited quanti ties. This opens up a considerably wider scope of research based on this unique concept of C3e dibasic and C54 tribasic acids. Similar to t h e commercial product, Empol 1022, which contains a dibasic to tribasic ratio of 75:25, and a 3-4 % mono basic acid content, these new develop ment grades are all stable, viscous liquids, further described as follows: Emery 3019-S: Predominantly dibasic with a dibasic to tribasic acid ratio of 95:5 and a normal monobasic acid con tent of 3-4%. Emery 3079-S: Low monobasic acid counterpart of 3019-S. Possesses a dibasic to tribasic acid ratio of 95:5 but contains less than 1 % of monobasic acids. Emery 3065-S: Low monobasic modifi cation of Empol 1022. Contains less than 1 % monobasic acids and a dibasic to tribasic ratio of 75 :25. Emery 3O20-S: Similar to Empol 1022 but has a reduced unsaturated acid con tent. It is extremely stable to heat and oxidation and possesses a light color. Emery 3Q55-S: Predominantly tribasic with a dibasic to tribasic acid ratio of 15:85. Contains no monobasic acids. For further information, mail coupon below.
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BUSINESS & FINANCE same period of t h e previous year. Prof its, however, d i p p e d to $708,000 ( 5 5 cents a share) from $759,000 (61 cents a share) in 1956. W i t h orders during the six months of over $20 million, t h e company forecasts sales above $40 mil lion for its current fiscal year. Beckman cites two reasons for t h e earnings decline. It h a d to absorb non recurring losses o n some of its govern ment contracts w h i c h will be completed this year. And research a n d develop ment costs, u p nearly $1 million for t h e latest half year, w e r e 6 7 % higher than a year ago. T h e s e expenditures a r e now about 1 3 % of sales. Most of the rise is a result of in creased activity in semiconductor a n d data processing research. Beckman ex-
New Line for Beckman Beckman Instruments p l a n s to ac quire Statham Laboratories in exchange for 400,000 shares of stock. Statham, whose annual sales a r e currently at a $5 million clip, manufactures pressure transducers, acceleromoters, a n d other devices used in aircraft and guided mis siles a n d for measurement a n d control applications; plants a r e at Los Angeles and Puerto Rico. " T h e m e r g e r adds to our organization a leader in important instrumentation for physical measure ment," says Beckman president Arnold O. Beckman. During t h e six months ending last Dec. 3 1 , Beckman's shipments hit a record $17.6 million, u p 3 7 % from the
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S E C Composite Index
2ndQtr.(1956)
3rd Qtr.
4th Qtr.
1st Qtr. (1957)
350, 300
250
Development a n d Service Department Emery Industries, Inc. C a r e w T o w e r , Cincinnati 2 , O h i o
200] ******* 168.4
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Emery Industries, Inc. D e p t . C - 2 B , C a r e w Tower Cincinnati 2 , Ohio
150
S E C Composite Index
Please send Development Product Bulletins on D 3019-S d 3020-S Π 3055-S D 3065-S ~ 3079-S
« 11T.5 1001 2nd Qtr.(1956)
.State
108
C&EN
FEB. 2 5, 1 9 5 7
3rd Q t r .
4th Qtr.
1st Qtr.(1957)
Want a Di- or Polybasic Acid that is DIFFERENT?
pects both fields will soon pay off. Its Shockley Semiconductor Laboratory has now developed a n e w semiconduc tor device and hopes to have prototypes under field evaluation soon. A n d it has orders for m o r e than $4.5 million worth of data processing systems.
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• St. Regis Paper's next acquisition w i l l be St. Paul & Tacoma Lumber Co.,
Tacoma. Wash., producer of plywood, lumber, a n d wood chips. St. Paul & Tacoma also owns about 114,000 acres of timber in Washington. St. Regis plans to exchange 850,000 shares of common stock for St. Paul's 15,000; 450,000 shares wdll be issued as soon as the transaction is completed and 400,000 in three subsequent yearly in stallments. St. Regis reports it earned $22.5 million ($3.15 a share) last year on record sales of $330 million; in 1955 it netted $19.0 million on a $257.1 million volume.
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R4
Top: Mol. Wt.—565 Total C a r b o n s - 3 6 V i s c o u s Liquid Bottom: Mol. Wt.—845 Totol Carbons—54 V i s c o u s Liquid
Process Industries Trends CIGARETTES C o n s u m p t i o n , Use o f |
Tax F r e e
A n d T a x P a i d , in B i l l i o n s
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G U M AND W O O D
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Stocks, End of Q u a r t e r s Thousands o f 5 2 0 - P o u n d Drums
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Then t r y EMPOL* POLYMERIZED ACIDS!
Source: U. S. Deportment of Agriculture
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Relatively low in cost, these viscous liquids offer a very unusual combina tion of high molecular-weight a n d polyfunctionality that should be of extreme interest to manufacturers of resins, polyesters, polymers and similar type materials for many fields of application. Such fields already include adhesives, coatings, corrosion inhibitors, de-emulsifiers, emulsify ing agents, films, foams, lube additives, elastomers and surface coatings. In addition t o commercial Empol 1022 which contains 7 5 % dibasic and 22% tribasic acids, Emery offers several "development" grades that are essentially all dibasic or tribasic. This added flexibility of composition offers additional opportunities for research in new fields as well as the fields where the commercial product is already used. Mail c o u p o n below for complete literature on Emery Polymerized Acids.
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Organic Chemical Sales Department
EXPORTS Chemicals a n d Related Products AAilhons of Dollars
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Emery Industries, Inc., Carew T o w e r , ?' *
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Emery Industries, Inc., Dept. CÎA, Carew Tower, Cincinnati 2 , O h i o Please send literature on Emery Polymerized Acids. I am especially interested in • | | polybasic materials for « Name
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1955
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Title
Company
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2 5.
1957
C&EN
109
