DEAN WITTER, DISCOVER & CO. 2ND QUARTER EARNINGS UP 15% TO A RECORD $238 MILLION; SIX-MONTH EARNINGS A RECORD $460 MILLION.NEW YORK--(BUSINESS WIRE)--July 24, 1995--Dean Witter witter Verb Chiefly Brit informal to chatter or babble pointlessly or at unnecessary length [origin unknown] witter verb chatter, chat, rabbit (on) , Discover & Co. today reported record quarterly net income of $237.5 million, up 15 percent from the $206.9 million reported for the second quarter of 1994. Earnings per share increased 15 percent to $1.39 from $1.21 last year. On a fully diluted basis, earnings per share were $1.35 compared to $1.19 in the second quarter of last year. Annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. return on equity for the first six months of the year was 21.3 percent. Both of the company's major businesses had record quarters. Credit Services earnings rose 9 percent to $140.6 million from last year's second quarter, and Securities earnings climbed 25 percent to $96.9 million. "We had an outstanding quarter and first half of the year," said Philip J. Purcell Philip J. Purcell headed Sears' 1981 acquisition of Dean Witter, helping to create the Discover Card. After Morgan Stanley merged with Dean Witter Reynolds in 1997, Purcell replaced Morgan Stanley's John J. Mack as CEO. , Chairman and Chief Executive Officer. "We're in a couple of growth industries. In Securities, our assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. climbed to record levels, and we've done an excellent job in controlling costs. In Credit Services, we've participated in the rising volume of credit card transactions, we're marketing aggressively, and we've increased revenues. We're investing in growth and will continue to invest at this higher level through 1995." Net income for the first half of 1995 reached $459.6 million, up 10 percent from $416.4 million for the same period in 1994. Earnings per share increased 11 percent to $2.71 from $2.44 for the first half of 1994. Second quarter net operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. were $1.43 billion, a 15 percent advance over last year's $1.24 billion. First half net operating revenues increased 11 percent to $2.79 billion. CREDIT SERVICES Merchant and Cardmember fees increased 23 percent from the second quarter of last year to $298.8 million. Managed loan net interest income rose 22 percent over 1994's second quarter to $606.3 million on higher loan portfolio balances. Managed loans increased by $5.7 billion or 26 percent over last year to a record $27.1 billion. The provision for loan losses rose 35 percent to $240.5 million from the second quarter of last year, primarily as a result of the growth in managed loans. Second quarter net operating revenues were a record $665.0 million, up 18 percent from last year's second quarter. Credit Services operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. rose as a percentage of net operating revenues by 3.4 percentage points in the second quarter to 66.1 percent. This increase was the result of a continuing investment in growth and new products. Marketing and business development costs of $132.0 million rose 36 percent from last year's second quarter due to increases in account acquisition programs, higher cashback cashback Noun 1. a discount offered in return for immediate payment 2. a service by which a customer in a shop can draw out cash on a debit card cashback cash n (= discount bonus expense related to increased sales volume, and increases in marketing for the new Private Issue Card. Information processing information processing: see data processing. information processing Acquisition, recording, organization, retrieval, display, and dissemination of information. Today the term usually refers to computer-based operations. and communication expenses of $105.4 million rose 29 percent compared to 1994's second quarter, largely as a result of increased systems development costs, postage rate increases and volume growth. General purpose credit card accounts reached 33.5 million, up 3.3 million or 11 percent from the end of the second quarter of last year. The NOVUS Network of service establishments enrolled over 150,000 new merchant locations for the year to date. SECURITIES Net operating revenues for the quarter increased to a record $759.9 million, up 13 percent from a year ago, as Securities benefited from very strong investor interest in equities. Commission revenues climbed 20 percent to $247.9 million from last year's second quarter. The quarter's rally in equities, particularly in the over-the-counter markets over-the-counter market Trading in stocks and bonds that does not take place on stock exchanges. Such trading occurs most often in the U.S., where requirements for listing stocks on the exchanges are strict. , also led to an 18 percent rise in principal transactions. Investment banking revenues advanced 21 percent to $48.7 million for the quarter as underwriting activity expanded. Capital responsibility reached an all-time high of $204.5 billion compared to $175.7 billion at the end of last year's second quarter and $180.4 billion at the end of last year. Assets under management and administration were a record-high $73.3 billion at quarter end, up $6.4 billion for the year to date, primarily due to higher net asset values for equity and fixed income funds. Asset management and administration fees increased 3 percent to $251.0 million from the second quarter of 1994. Other revenues declined 29 percent compared to the second quarter of 1994, due to a gain in the prior year quarter on the sale of the company's interest in Midland Walwyn, a Canadian securities firm. Net credit income increased 42 percent for the second quarter to $65.8 million, due mainly to rising interest rates. Securities operating expenses for the quarter of $599.9 million declined as a percentage of net operating revenues by 2 percentage points from last year's second quarter to a record low 78.9 percent. The number of account executives increased by 54 for the quarter and by 293 from the end of the second quarter of 1994 to an all-time high of 8,054. CONTACT: Dean Witter Dean Witter may refer to:
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Timothy Lee Corporate Communications Corporate communications is the process of facilitating information and knowledge exchanges with internal and key external groups and individuals that have a direct relationship with an enterprise. (212) 392-8709 or Amy A. Pappas Investor Relations Investor relations The process by which the corporation communicates with its investors. (212) 392-6171 |
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