Net Income Mixed at Big Brokerages in 3rd Quarter

Merrill Lynch & Co. and Paine Webber Group Inc. reported Monday that their earnings declined in the third quarter, while another large securities firm, Bear Stearns Cos., said its fiscal first-quarter profit rose over a year ago.

Meanwhile, Charles Schwab Corp., a San Francisco-based discount brokerage, said it had a sharp earnings increase in the three months ended Sept. 30. Merrill Lynch, based in New York, said net income from continuing operations fell to $43.2 million from $56.1 million in 1988. Revenue rose 10% to $2.8 billion from $2.6 billion.

Bear Stearns, of New York, said first-quarter earnings totaled $22.1 million, compared to $20.5 million in the same period last year. Revenue rose 21% to $580.4 million from $478.9 million in 1988.

Paine Webber, also of New York, said third-quarter earnings totaled $16.83 million on revenue of $444.87 million. That compared to earnings of $20.92 million on revenue of $450.73 million in 1988.

Merrill Lynch said the third-quarter results “reflected an industrywide softness in some of our core business activities.”

“The lower volume of underwriting activity and principal transactions were partially offset by revenue increases from commissions and asset management fees,” the company said in a statement.

For the first nine months of this year, Merrill Lynch said it earned $144.4 million from continuing operations, compared to $164.1 million in 1988.

Bear Stearns Chairman Alan C. Greenberg said he was pleased with the first-quarter results “because several of our departments . . . were operating in a very difficult environment.”

He said the company saw a decline in principal transactions during the quarter due to a drop in government bond trading activities, among other things.

Paine Webber said third-quarter results included a broad-based improvement in core businesses. It said the 1988 results included a pretax gain of $46.3 million and that, without that gain, the company would have shown a loss for the quarter.

For the first nine months of 1989, Paine Webber’s earnings totaled $41.09 million on revenue of $1.27 billion. That compared to earnings of $41.84 million and revenue of $1.30 billion during the same period last year.

Schwab said it earned $4.6 million in the third quarter on $142.1 million in revenue. That was up from earnings of $2.7 million and revenue of $98 million.

For the first three quarters, Schwab earnings rose to $12.8 million from $6.8 million. Revenue totaled $185.6 million, up from $158.4 million.