E. F. Hutton Group Manages Turnaround

E. F. Hutton Group, whose brokerage unit has come under fire for its check-cashing practices in the early 1980s, posted a second-quarter profit of $25.1 million in contrast with a $7.8-million loss in the period a year ago. Hutton said its second-quarter revenue from continuing operations rose 33% to $760 million from $570 million.

The revenue figures exclude results from its E. F. Hutton Credit Corp., which the company has previously announced that it expects to sell to Chrysler Financial Corp. The sale is expected to be completed in August and isn’t expected to have a material impact on the firm’s earnings, Hutton said.

The earnings figures, however, reflect a contribution of $3.4 million from the credit unit.

The company said its revenue from principal transactions, mainly bond trading, more than doubled to $89.5 million for the quarter. It said investment banking revenue climbed 54.9% to $32 million, and commission revenue rose 19% to $24 million.

Robert Fomon, chairman and chief executive, said it is impossible to determine what effect, if any, the publicity about the company’s banking practices had on revenue and earnings for the period.

Hutton’s brokerage unit, the nation’s fifth-largest, pleaded guilty in May to 2,000 felony counts of mail and wire fraud in connection with a check-writing scheme that prosecutors said harmed many of some 400 commercial banks doing business with Hutton.

The government said the infractions occurred from late 1980 through early 1982.