Profits Up at Merrill Lynch, Expected to Rise at Goldman Sachs
Jan. 25, 1993
NEW YORK (AP) _ Merrill Lynch & Co. today said its fourth quarter earnings rose 30 percent as Wall Street's largest brokerage house concluded a second record year of earnings.
Meanwhile, a published report today said the privately held Goldman Sachs Group LP & Co. is well on its way of earning more than $1 billion for its 1992 fiscal year.
The results come as most major brokerages are reporting strong results due heavy activity by individual and corporate investors. Merrill Lynch & Co. Inc.
Fourth quarter earnings were $221.4 million, or $1.96 a share for the October-December period, up from $170.7 million, or $1.45 a share, during the comparable period in 1991.
Revenue for the quarter rose 5.8 percent to $3.3 billion from $3.12 billion a year ago.
For the year, Merrill reported record net income of $893.8 million, or $7.82 a share, compared with $696.1 million, or $5.90 a share in 1991. The full-year 1992 results reflect a $58.6 million charge taken in connection with the firm's adoption of new accounting rules for retirement benefits and income taxes.
Total revenues were up 9 percent in 1992 to $13.4 billion and the firm's pretax profit, before the special accounting charges, was $1.6 billion, up 59 percent from 1991 levels.
''All of our businesses contributed to this second consecutive year of record earnings,'' William A. Schreyer, chairman, and Daniel P. Tully, president and chief executive, said in a joint statement.
The firm said total assets in custody for its clients worldwide rose 10 percent in 1992 to $476 billion.
Fourth-quarter revenues from commissions rose by 5 percent and from principal transactions by 4 percent from levels in the comparable period in 1991. Investment banking revenues, however, dipped 4 percent to $359 million.
With the increased business, non-interest expenses, which includes salaries and overhead, rose 6 percent to $1.7 billion for the fourth quarter, with employee pay and benefits up 7 percent.
Merrill reported a 47 percent increase to $231 million in its so-called other revenues, chiefly the result of its Merrill Lynch Consults portfolio management service for individual investors and gains from the sale of Teleport Communications Inc., a telephone company.
Net interest and dividend profit rose 50 percent to $287 million due to trading opportunities based on low interest rates.
Merrill Lynch was up 37 1/2 cents at $67.37 1/2 a share in early afternoon trading on the New York Stock Exchange. The Goldman Sachs Group L.P.
Net income for Goldman's third quarter, which ended Aug. 28, was $253.2 million, up 70 percent from $149.3 million during the comparable period in 1991, according to the latest issue of Investment Dealers' Digest, a respected industry magazine.
Total revenues were $2.28 billion for its third quarter, up from $1.9 billion during the comparable period in 1991.
Goldman Sachs, Wall Street's largest private partnership, does not release its earnings. IDD said it obtained the information in a memorandum circulated to investors. Goldman issued the memo as it sought to raise $300 million for its own account, IDD said.
''The document confirms what most observers have expected, but had no way of proving: the fact that Goldman had another great year,'' the magazine said.
A telephone message seeking comment from a Goldman Sachs spokesman wasn't immediately returned. The report said the firm declined comment about the memo.
The magazine said Goldman earned $833.8 million for the first nine months of 1992, ''putting it on a course to best its 1991 earnings of $1.5 billion.''