Word: pretax
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Dates: during 1970-1979
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...Pretax Profits Reply to Questtionaire GAO Study of 146 Contracts
...storm. It was condemned by spokesmen of the aerospace industry. The Pentagon-treated to an advance look-strongly urged the GAO to do its sums over again. The Pentagon's concern over the GAO's "interim" findings was understandable enough. The report contains startling disparities between the pretax profits that defense and space contractors acknowledged in reply to a GAO questionnaire and the GAO's findings after a detailed study of 146 recently completed contracts totaling $4,256,000,000. This is how they compared...
...comparison, the pretax profits of all U.S. manufacturing corporations in 1969 averaged 20.1% on stockholders' equity. The results of the GAO study of the 146 contracts carries the strong implication that the average profit of 56.1% applies to most other defense contracts as well. The GAO claims that defense work is so lucrative because of a device that often removes much of the risk from Pentagon contracting: progress payments, made weekly, for up to 90% of the costs incurred. Progress payments rose from $3.3 billion in 1964 to $10 billion last year. Such payments are a common practice...
President Nixon's expansionary budget has convinced many Wall Streeters that the Government will revive the economy and that inflation will continue at a relatively high rate. Manhattan's Argus Research, which had an excellent forecasting record last year, predicts that pretax profits this year will jump 15% to 18% above 1970. Another bullish factor is the dramatic decline of interest rates. The yield on high-quality corporate bonds has dropped from a 1970 peak of 9.4% to 6.9%, a return that many money managers believe can be bettered in stocks...
...Tomaso calls back and -without revealing the identity of the seller to the buyer-tries to close a deal. The price is usually based on the most recent transaction on the exchanges. Last year, says Tomaso, he handied some $350 million worth of stock deals, enough to put his pretax earnings well into six figures...