Quarterly Financial Report for Manufacturing, Mining, and Trade Corporations

UNITED STATES BUREAU OF THE CENSUS

Economic and Statistics Administration, U.S. Department of Commerce

ADVANCE DATA FROM THE QUARTERLY FINANCIAL REPORT FOR MANUFACTURING, MINING, AND TRADE CORPORATIONS--FOURTH QUARTER 1997

April 1997-------------------Released 10 a.m. (EDT), Monday, April 6, 1998 (CB98-52)
Contact: Ronald H. Lee (301) 457-3343 or Frank Hartman (301) 457-3379.

Except where noted, all figures in text and tables are not seasonally adjusted.
Sales and after-tax profits for all manufacturing are presented in Table 1 on both a seasonally adjusted and an unadjusted basis. Seasonally adjusted historical data for this series, as well as for total durable and nondurable manufacturing, are presented in Table 3. Data for individual manufacturing industries are not seasonally adjusted.

[Quarterly Financial Report for Manufacturing, Mining, and
Trade Corporations--Graphic]

Manufacturing corporations` seasonally adjusted after-tax profits averaged 6.1 cents per dollar of sales for the fourth quarter of 1997, down 0.2 (+/-0.1) cents from the third quarter of 1997. The Commerce Department`s Bureau of the Census also reported that on an unadjusted basis, after-tax profits for the fourth quarter averaged 5.5 cents per dollar of sales, down 0.9 (+/-0.1) cents from the preceding quarter, but showing no statistically significant change from the same quarter in 1996.

For the fourth quarter of 1997, manufacturers` seasonally adjusted after-tax profits were $61.1 billion, down $0.9 (+/-1.4) billion from last quarter. On an unadjusted basis, fourth quarter after-tax profits were $56.3 billion, down $6.4 (+/-1.4) billion from last quarter, but up $2.6 (+/-1.4) billion from the same quarter a year ago.

Unadjusted durable manufacturers` after-tax profits for the fourth quarter of 1997 were $27.8 billion, down $1.4 billion or 4.7 percent (+/-4.5%) when compared to the third quarter of 1997. Most underlying industry categories were down. Aircraft and fabricated metals reported declines of $1.2 (+/-0.1) and $1.1 (+/-0.4) billion, respectively, due primarily to lower operating profits. Also down were stone, clay, and glass, electrical machinery, and nonferrous metals. Machinery and motor vehicles reported increases. Machinery`s $2.0 (+/-0.8) billion increase was due chiefly to improved foreign earnings. Motor vehicles` improvement of $1.7 (+/-0.1) billion was a result of gains from asset sales more than offsetting declines in operating profits and foreign earnings.

When compared to the fourth quarter of 1996, unadjusted durable manufacturers` profits were up $2.7 billion or 10.8 percent (+/-5.2%), with the underlying industries showing mixed results. Motor vehicles, stone, clay, and glass, iron and steel, and lumber reported increases. Motor vehicles` $2.1 (+/-0.1) billion increase was due chiefly to gains from asset sales more than offsetting declines in operating profits and foreign earnings. Aircraft`s $0.7 (+/-0.1) billion decline, the only statistically significant decrease for the durables group, was due principally to lower operating profits.

Unadjusted nondurable manufacturers` after-tax profits for the fourth quarter of 1997 were $28.5 billion, down $5.1 billion or 15.1 percent (+/-1.7%) when compared to the third quarter of 1997. Most underlying industry categories were down. Food and paper`s decreases of $2.7 (+/-0.3) and $1.4 (+/-0.2) billion, respectively, were primarily a result of declines in operating profits and the inclusion this quarter of significant nonrecurring charges against income. The $2.2 (+/-0.2) billion drop in residual of chemicals was due chiefly to lower operating profits and the absence of gains reported on asset sales in the third quarter of 1997. Apparel, rubber, and industrial chemicals also reported declines. Drugs and petroleum reported increases in earnings. Drugs` $2.6 (+/-0.1) billion increase was principally a result of increased dividends from foreign subsidiaries more than offsetting a decline in operating profits.

When compared to the same quarter in 1996, unadjusted nondurable manufacturers` profits showed no statistically significant change from last year, with the underlying industry categories showing mixed results. Food, printing, paper, and apparel reported decreases. Food`s $1.6 (+/-0.3) billion decline was primarily attributable to lower operating margins and the inclusion of significant nonrecurring charges against income this quarter. Drugs, rubber, and petroleum reported increases. Drugs` $2.6 (+/-0.2) billion improvement was principally a result of increased dividends from foreign subsidiaries.

Manufacturers` seasonally adjusted sales for the fourth quarter of 1997 were $997.5 billion, up $7.9 billion or 0.8 percent (+/-1.0%) from last quarter. On an unadjusted basis, sales were $1,014.9 billion, up $28.5 billion or 2.9 percent (+/-1.0%) from last quarter and up $37.2 billion or 3.8 percent (+/-1.0%) from the fourth quarter of 1996.

Seasonally adjusted sales at the nondurable level were $465.7 billion, up $3.6 billion or 0.8 percent (+/-1.3%) from last quarter. Seasonally adjusted durable manufacturers` sales were $531.8 billion, up $4.3 billion or 0.8 percent (+/-1.5% ) from last quarter. Unadjusted sales at the nondurable manufacturing level were $472.5 billion, up $6.0 billion or 1.3 percent (+/-1.3%) from last quarter. On a same quarter a year ago basis, nondurable manufacturers` sales were up $2.4 billion or 0.5 percent (+/-1.3%) from the fourth quarter of 1996. Unadjusted durable manufacturers` sales were $542.4 billion, up $22.5 billion or 4.3 percent (+/-1.5%) when compared to the third quarter of 1997. On a same quarter a year ago basis, durable manufacturers` sales were up $34.8 billion or 6.8 percent (+/-1.6%).

Also included in this release are fourth quarter 1997 data for large mining and wholesale and retail trade corporations.

These advance data, based on quarterly financial reports from about 8,300 corporations, were released today from the Quarterly Financial Report for Manufacturing, Mining, and Trade Corporations--Fourth Quarter 1997 (QFR-97-4). The publication includes statements of income and retained earnings, balance sheets, and related financial and operating ratios. The aggregated data are classified by industry and asset size.

EXPLANATORY NOTES:

This quarter`s publication contains data revised due to the reclassification of corporations by industry, and revisions that reflect respondents` corrections of submitted data subsequent to original publication.

The data presented in this report are estimated from a sample survey and therefore are subject to sampling variability as well as nonsampling variability such as response error, nonreporting, and coverage errors. Estimates of sampling variability are presented in the publication. A statement such as "up 2.5 (+/-0.15) cents," appearing in the text, indicates the range (+2.35 to +2.65 cents) in which the actual change is likely to have occurred. The range given for the change is a 90 percent confidence interval that accounts only for sampling variability. If the range had contained zero (0), it would have been uncertain whether there was an increase or decrease; that is, the change would not have been statistically significant. For any comparison cited without a confidence interval, the change is statistically significant. The quarterly publication includes more detailed explanations of confidence intervals and sampling variability, along with additional measures of sampling variability.

AVAILABILITY:

This report is available, under "Publication", at <http://www.census.gov/csd/www/qfr.html>.

The "Quarterly Financial Report for Manufacturing, Mining and Trade Corporations" publication series is offered for sale by the Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954 (202-512-1800). Publications are available two weeks from the date of this release and phone orders are taken at (202) 512-1800 (see also the "Subscription order form"). The annual subscription rate is $33. [Remittances from foreign countries must be by international money order or by draft on a U.S. bank, $41.25 a year.]

Files are also available on 3.5 inch flexible diskettes from U.S. Department of Commerce, Bureau of the Census (MS1921), P.O. Box 277943, Atlanta, GA 30384-7943 (301-763-INFO(4636)). The annual subscription cost is $84; $66 for the first diskette and $6 for each additional diskette.

Schedule of Advance Data Release Dates--1998
Economic Indicator Release Schedule

Quarter      Manufacturing, Mining, and Wholesale Trade   Retail Trade

First 1998                     June 15, 1998             July 13, 1998
Second 1998                    September 14, 1998        October 14, 1998
Third 1998                     December 14, 1998

Questions regarding this report (or program) should be directed to Ronald H. Lee (301) 457-3343 or Frank Hartman (301) 457-3379.

TABLE 1. PART A--QUARTERLY FINANCIAL REPORT FOR MANUFACTURING CORPORATIONS


                                                   Seasonally Adjusted
                                                 4Q        3Q        4Q    
                                               1997      1997(1)   1996(1) 
Rate of return (after taxes):
 Cents per dollar of sales ................     6.1       6.3       6.1
 Percent on equity (annual rate) ..........      NA        NA        NA    

                                                   (million dollars) 
Net Sales.................................. 997,498   989,601   960,932
 Income after income taxes ................  61,060    61,923    58,425
 Dividends paid (cash) ....................      NA        NA        NA

(1) Revised.