Brokerage Firms Report Sharply Higher Earnings

Merrill Lynch & Co. said its third-quarter earnings more than doubled from the same period a year ago, while Paine Webber Inc. said its profit tripled in its latest quarter.

The two financial services giants said the earnings gains stemmed from improvements in virtually every phase of their businesses.

Merrill Lynch said its net earnings for the 13 weeks ended Sept. 26 rose to $93.7 million from $38.4 million a year earlier.

Third-quarter revenue was up 34% to $2.33 billion from $1.75 billion.

Chairman William A. Schreyer said: “Even though stock market activity has eased from the all-time highs set earlier this year, our commission revenues continue well above those attained in any quarter prior to 1986.”

He said revenue from securities trading was second only to revenue in the first quarter of this year, while insurance revenue and asset management and custodial fees reached a record high.

For the first nine months of the year, Merrill Lynch said its earnings rose 68% to $271.6 million from $161.6 million a year earlier.

Nine-month revenue rose 34% to $6.84 billion from $5.10 billion.

Paine Webber said its profit for its fiscal fourth quarter ended Sept. 30 soared to $21.1 million from $6.8 million a year earlier.

Revenue for the quarter was up 21% to $605.6 million from $499.8 million.

Donald B. Marron, chairman and chief executive, said: “Paine Webber’s performance reflects the overall health of the securities industry and the growing strength of our organization.”

He said the firm’s consumer markets business was strong, with growth in both broker productivity and assets under management. He said the fixed income division produced “good trading results through difficult markets.”

For the fiscal year, Paine Webber said its profit more than doubled to $71.6 million from $33.8 million a year earlier.

Full-year revenue rose 27% to $2.38 billion from $1.89 billion.