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Morgan Stanley, Hutton Report Quarterly Gains

April 22, 1987

NEW YORK (AP) _ E.F. Hutton Group Inc. and Morgan Stanley Group Inc., two of the nation’s largest brokerage companies, on Wednesday reported a healthy increase in their first-quarter profits on the strength of a bullish stock market.

Hutton, based in New York, said net income for the three months ended March 31 rose 26 percent, to $66.1 million, or $2.01 per share, from $40.1 million, or $1.27 a share, a year ago. Revenue rose 19 percent to a record $871 million from $730 million.

The results included an extrordinary credit of $26.8 million for tax benefits in 1987 and a credit of $5.2 million last year.

Morgan Stanley, also of New York, said its net income rose about 11 percent percent to $64.27 million, or $2.54 per share, from $58.03 million, or $2.92 a share. Revenue totaled $747.04 million vs. $589.63 million.

Both companies said a rising stock market affected their quarterly earnings.

″Unprecendented stock market activity coupled with new highs in price levels were key factors behind the commission growth,″ said Robert Rittereiser, Hutton’s president and chief executive officer.

Hutton said quarterly commissions reached a record $278.3 million, up 16 percent from $239.5 last year. Investment banking revenues climbed to $101.4 million, compared with $60.3 in 1986. Asset management fees rose to a record $70.2 million from $46.6 million.

Morgan Stanley’s first-quarter commissions were $68.01 million, compared with $49.99 million. Asset management fees rose to $15.51 million from $11.09 million. Interest and dividends were up to $294.44 million from $241.58 million.

″Our results reflected continued revenue and income growth attributable primariliy to buoyant worldwide equity markets, increased financial advisory activity and generally higher securities sales and trading volumes across a broader global product and client base,″ the company said in a news release.

Also Wednesday, Piper Jaffray Inc., parent company of the Minneapolis investment company Piper, Jaffray & Hopwood Inc., said net income rose to $2.63 million, or 68 cents a share, on revenue of $48.26 million. That compared with earnings of $2.45 million, or 64 cents a share, and revenue of $42.17 million.

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