OCR Text |
Show KENNEC01T EARNINGS UP FORFIRST HALF The following letter from Charles R. Cox, pirsident of Kennecott Copper Corporation, New York City, was given to stockholder July 22. To Stockholders: F.arnings for the first six months of 1959 were $4.32 a share, as compared with $2.07 for the came period of 1958. Earnings in the first quarter of this year were $2.03 a share, and in the second quarter $2.29. The increase in earnings in the first half waa due largely to price. Among other factors fac-tors was a non-recurring credit a-mounting a-mounting to 19 cents per share for exploration expenses, previously written off, now capitalized. The average prive received for our copper in the first six months was 30. 1 cents a pound, whereas the price received in the same period per-iod of 1958 was 23.5 cents. Kenne-colt's Kenne-colt's total khipmrnts in the first six months of this year were 279,-600 279,-600 tons, as compared with 247,700 tons in the corresponding period of 1958. I he increased tonnage vtas sold in the United States. 1 otal consumption of copper by domestic fabricators in the first half of 1959 averaged 122,800 ton per month, a compared with 90,400 tons per month in the same period of 1958. U. S. producer' stock are only moderately higher than at the end of last year, as is also true . of fabricators' stocks, despite the increase in consumption. Consumption of copper abrpad, as measured by deliveries to foreign for-eign fabricators, ha decreased. A a result the London metal exchange price, which is the price on which most foreign sales are based, has declined from a high of approximately approxi-mately 32 cents a Dound last March , to about 28 cents as of July 21. As of July 15, the U.S. producers . price to domestic fabricator was , reduced to 30 cents, down from : 3 I '2 cents, where it had been since last March. It should be noted that business in the last half of the year will be affected by vacation shutdown at plants of fabricators. In addition, any effect of strikes will be felt in the second half. Labor The majority of labor contract at our Western Mining Divisions expired June 30. They have been extended on a day-to-day basis. No progress toward settlement has thu far been achieved. Contracts at our Chilean Division Divis-ion expire Septtember 30, 1959. Antitrust Suit The Department of Justice ha filed suit in federal court for the southern district of New York charging that Kennecott violated the Clayton Act when it acquired the Okonite Company, a wire and cable manufacturer, last November. This suit is being brought under Section 7 of the Act, which prohibits pro-hibits acquisitions where the effect 'may bo substantially to lessen com petition, or tend to create monopoly." mon-opoly." The government specifically specific-ally charges that the acquisition of Okonite may substantially lessen competition in the production and sale of copper, and of copper and copfjer content products, including copper wire rind cable. The government govern-ment asks that Kennecott be forced to divest itself of Okonite and be enjoined from acquiring any other company engaged in the production, produc-tion, fabrication or sale of copper or copper alloys or related products pro-ducts for such period as the court may direct. We are confident that we did not violate the law in acquiring Okonite and that the trial will so demonstrate. |