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MERRILL LYNCH REPORTS RECORD SECOND QUARTER AND HALF-YEAR EARNINGS; SECOND QUARTER NET EARNINGS UP 24 PERCENT TO $227.7 MILLION

 MERRILL LYNCH REPORTS RECORD SECOND QUARTER AND HALF-YEAR EARNINGS;
 SECOND QUARTER NET EARNINGS UP 24 PERCENT TO $227.7 MILLION
 NEW YORK, July 14 /PRNewswire/ -- Merrill Lynch & Co., Inc. (NYSE: MER) today reported record second quarter net earnings of $227.7 million, up 24 percent from the previous second quarter record of $184.3 million in 1991.
 Quarterly earnings per common share were $1.98 primary and fully diluted, compared with $1.58 primary and $1.55 fully diluted in the year-ago period.
 Net earnings for the first half of 1992 were also a record, up 38 percent from the prior year's period to $505.2 million.
 Six month earnings per common share were $4.37 primary and fully diluted, compared with $3.20 primary and $3.08 fully diluted in the 1991 period.
 Second quarter net revenues (revenues after interest expense) advanced 18 percent above the 1991 second quarter, and non-interest expenses rose 13 percent. Net profit margin advanced to 10.7 percent, compared with 10.2 percent in last year's second quarter, despite an increase in the effective tax rate from 31.6 percent to 42 percent year-to-year.
 Pretax earnings rose 46 percent to $393 million, compared with $269 million in the corresponding quarter a year ago. The pretax profit margin increased to 18.4 percent, compared with 14.9 percent in the prior year's quarter.
 "On top of a record performance in 1991, the achievement this year of record first-half earnings is extremely gratifying and reflects our strong, sustained market position with a diverse investor and issuer client base worldwide," said Chairman William A. Schreyer and President and Chief Executive Officer Daniel P. Tully in a joint statement.
 "Our revenues are well-balanced among our major lines of business, and expenses have been consistent with the level of business activity. Going forward, our highest priority will continue to be the delivery of exceptional, innovative client service coupled with careful expense control."
 Revenues
 Revenue increases were broad-based, with net revenues advancing 18 percent to $2.1 billion, and total revenues up 10 percent to $3.4 billion, compared with the 1991 second quarter.
 Investment banking revenues advanced 27 percent to a record $399 million. Contributing factors included a continued strong underwriting performance, with underwriting revenues surpassing the previous record set in the first quarter of 1992, despite a slackening of the initial public offering market in the latter part of the quarter. Fees from merger and acquisition advisory services also increased substantially over the prior year's period.
 Principal transactions revenues rose 19 percent to $552 million from the prior year's quarter, reflecting continued strong performance in such areas as swaps, government and municipal securities and corporate bonds.
 Commission revenues increased 8 percent from the year-ago period to $569 million. Contributing to this increase was a higher level of commissions from mutual funds, annuities and listed securities.
 Asset management and custodial fees increased 11 percent to $217 million. Assets under fee-based management by Merrill Lynch Asset Management increased 8 percent from the year-earlier quarter to $128 billion at quarter-end.
 Net interest and dividend profit of $234 million increased 49 percent from the prior year's quarter, primarily as a result of higher levels of interest earning assets -- among them mortgage-backed securities which performed strongly -- and favorable movements in interest rate spreads.
 Expenses
 Non-interest expenses of $1.7 billion increased 13 percent above last year's quarter. The largest expense category, compensation and benefits, increased 13 percent to $1.1 billion as a result of increased business activity and profitability. Compensation and benefits expense as a percentage of net revenues declined to 50.8 percent from 53 percent in the year-ago period.
 The second largest area of expense -- facilities related costs -- which includes occupancy, communications and equipment rental, and depreciation and amortization, was held virtually flat.
 Brokerage, clearing and exchange fees, a category related to business volume, increased 12 percent to $72 million.
 Advertising and market development expenses were up 36 percent to $79 million, primarily as a result of financial consultant recognition expenses driven by the pace of business activity, and discretionary increases in sales promotion programs.
 Professional fees were up 20 percent to $63 million, mostly because of discretionary business and systems development projects. Other expenses increased by 26 percent to $170 million.
 MERRILL LYNCH & CO., INC.
 Preliminary Unaudited Earnings Summary
 (In thousands, except per-share amounts)
 Pct. of Pct. of
 Three months ended 6/26/92 revs.(A) 6/28/91 revs.(A)
 Revenues:
 Commissions $568,842 16.9 $525,982 17.2
 Interest and dividends 1,460,088 43.5 1,413,203 46.1
 Principal transactions 551,767 16.4 463,399 15.1
 Investment banking 399,312 11.9 313,702 10.2
 Asset management and
 custodial fees 216,789 6.5 195,329 6.4
 Other 159,527 4.8 152,246 5.0
 Total revenues 3,356,325 100.0 3,063,861 100.0
 Interest expense 1,226,347 36.5 1,256,105 41.0
 Net revenues 2,129,978 63.5 1,807,756 59.0
 Non-interest expenses:
 Compensation and benefits 1,081,980 50.8 958,536 53.0
 Occupancy 117,965 5.5 114,404 6.3
 Communications and
 equipment rental 84,453 4.0 87,242 4.8
 Depreciation and amortization 68,663 3.2 67,891 3.8
 Brokerage, clearing and
 exchange fees 71,847 3.4 64,139 3.6
 Advertising and market
 development 79,259 3.7 58,479 3.2
 Professional fees 63,254 3.0 52,642 2.9
 Other 170,006 8.0 135,067 7.5
 Total non-interest expenses 1,737,427 81.6 1,538,400 85.1
 Earnings before income taxes 392,551 18.4 269,356 14.9
 Income tax expense 164,872 7.7 85,052 4.7
 Net earnings 227,679 10.7 184,304 10.2
 Preferred stock dividends 1,658 -- 4,410 --
 Net earnings applicable to
 common stockholders 226,021 -- 179,894 --
 Earnings per common share:
 Primary $1.98 -- $1.58 --
 Fully diluted 1.98 -- 1.55 --
 Average shares:
 Primary 113,964 -- 113,711 --
 Fully diluted 113,964 -- 118,139 --
 Percent of dollar change
 increase (decrease)
 Revenues:
 Commissions 8.1
 Interest and dividends 3.3
 Principal transactions 19.1
 Investment banking 27.3
 Asset management and custodial fees 11.0
 Other 4.8
 Total revenues 9.5
 Interest expense (2.4)
 Net revenues 17.8
 Non-interest expenses:
 Compensation and benefits 12.9
 Occupancy 3.1
 Communications and equipment rental (3.2)
 Depreciation and amortization 1.1
 Brokerage, clearing and exchange fees 12.0
 Advertising and market development 35.5
 Professional fees 20.2
 Other 25.9
 Total non-interest expenses 12.9
 Earnings before income taxes 45.7
 Income tax expense 93.8
 Net earnings 23.5
 Pct. of Pct. of
 Six months ended 6/26/9 revs.(A) 6/28/91 revs.(A)
 Revenues:
 Commissions $1,254,032 18.5 $1,060,500 17.1
 Interest and dividends 2,850,733 42.1 2,911,731 47.0
 Principal transactions 1,125,759 16.6 1,012,967 16.3
 Investment banking 760,451 11.2 508,618 8.2
 Asset management and
 custodial fees 436,938 6.5 385,898 6.2
 Other 342,690 5.1 323,296 5.2
 Total revenues 6,770,603 100.0 6,203,010 100.0
 Interest expense 2,418,240 35.7 2,603,217 42.0
 Net revenues 4,352,363 64.3 3,599,793 58.0
 Non-interest expenses:
 Compensation and benefits 2,191,755 50.4 1,920,257 53.3
 Occupancy 239,851 5.5 235,610 6.5
 Communications and
 equipment rental 172,259 4.0 173,466 4.8
 Depreciation and amortization 136,405 3.1 135,606 3.8
 Brokerage, clearing and
 exchange fees 139,228 3.2 125,088 3.5
 Advertising and market
 development 152,711 3.5 107,418 3.0
 Professional fees 120,984 2.8 103,635 2.9
 Other 328,178 7.5 264,843 7.4
 Total non-interest expenses 3,481,371 80.0 3,065,923 85.2
 Earnings before income taxes 870,992 20.0 533,870 14.8
 Income tax expense 365,817 8.4 168,596 4.7
 Net earnings 505,175 11.6 365,274 10.1
 Preferred stock dividends 3,532 -- 10,101 --
 Net earnings applicable to
 common stockholders 501,643 -- 355,173 --
 Earnings per common share:
 Primary $4.37 -- $3.20 --
 Fully diluted 4.37 -- 3.08 --
 Average shares:
 Primary 114,754 -- 110,915 --
 Fully diluted 114,754 -- 117,491 --
 Percent of dollar change
 increase (decrease)
 Revenues:
 Commissions 18.2
 Interest and dividends (2.1)
 Principal transactions 11.1
 Investment banking 49.5
 Asset management and custodial fees 13.2
 Other 6.0
 Total revenues 9.2
 Interest expense (7.1)
 Net revenues 20.9
 Non-interest expenses:
 Compensation and benefits 14.1
 Occupancy 1.8
 Communications and equipment rental (0.7)
 Depreciation and amortization 0.6
 Brokerage, clearing and exchange fees 11.3
 Advertising and market development 42.2
 Professional fees 16.7
 Other 23.9
 Total non-interest expenses 13.6
 Earnings before income taxes 63.1
 Income tax expense 117.0
 Net earnings 38.3
 (A) -- Revenues and interest expense are presented as a percentage of total revenues. Non-interest expenses and earnings are presented as a percentage of net revenues.
 -0- 7/14/92
 /CONTACT: James Wiggins, 212-449-7280, or William Clark, 212-449-7284, both of Merrill Lynch & Co./
 (MER) CO: Merrill Lynch & Co. Inc. ST: New York IN: FIN SU: ERN


CK-OS -- NY014 -- 9038 07/14/92 10:59 EDT
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