FleetBoston Financial Net Falls
Jul. 18, 2001
BOSTON (AP) _ FleetBoston Financial's second quarter profits sank 45 percent, falling well short of analysts' expectations as the capital markets sector soured.
The bank reported profits for the quarter ending June 30 of $531 million, or 48 cents per share, down from $971 million or 87 cents per share a year ago.
Excluding one-time items, including a $290 million after-tax write-down for investments, FleetBoston earned 81 cents per share. Analysts surveyed by Thomson Financial/First Call had expected profits of 79 cents per share.
The company's main capital markets units _ Principal Investing, investment bank Robertson Stephens and discount brokerage Quick & Reilly _ fell $500 million from a year ago. Over 80 percent of that loss came from Principal Investing, which took the $290 million write-down.
The company's sale of Fleet Mortgage resulted in an after-tax charge of $60 million, or 6 cents per share, in the second quarter.
``The operating environment for our capital markets business is clearly quite difficult,'' Chad Gifford, president and chief operating officer, said in a press release.
Chairman and chief executive Terrence Murray said the company expects to earn $1.50 to $1.60 per share for the second half of the year. Analysts had been expecting earnings of $1.73 for the final two quarters this year.
Second-quarter revenue fell 28 percent, dropping from $4.51 billion to $3.24 billion.
For the six months ended June 30, FleetBoston earned $672 million, or 60 cents per share, on revenue of $6.70 billion. In the year-ago period, it earned $2.05 billion, or $1.84 per share, on revenue of $9.39 billion.
Boston-based FleetBoston is the nation's seventh-largest financial holding company, with more than $200 billion in assets. It is the largest retail bank in the Northeast, with almost 1,700 branches.