Merrill Lynch, Paine Webber Net Soars : Securities: The huge profit increases are attributed to renewed demand for stocks and to an increase in corporate debt financing.

Merrill Lynch & Co., the nation’s biggest brokerage, said Tuesday that third-quarter earnings more than tripled as Wall Street continued to rack up huge profits in 1991.

Paine Webber Inc. reported that earnings in the July-September period quadrupled.

The stock prices of both firms soared in response to the reports. Merrill gained $3.25 a share to $51.375 on the New York Stock Exchange, with 1.6 million shares changing hands in heavy trading. Paine Webber shot up $4.25 to $28.625, a 17% gain on the day, on a volume of 1.15 million shares.

While the results compared to an especially poor performance industrywide last year, they reflected renewed demand for stocks by individual and institutional investors and for debt financing by U.S. companies.

Merrill Lynch

Merrill reported earnings of $160 million, or $1.37 per share, up from $46.1 million, or 38 cents per share in the same quarter of 1990. Total revenue increased 22% to $1.8 billion.

Merrill said business increased across the board. Investment banking revenue rose 57% because of continued strong underwriting of corporate securities. Revenue from commissions on stock and bond trades for customers gained 16%, while revenue from trading by the firm increased 22%. “Individual investors showed renewed interest during the quarter in equities and mutual funds as interest rates continued to fall,” Merrill Lynch Chairman William Schreyer and President Daniel Tully said in a statement.

Overall expenses rose 12% in the quarter, to $1.55 billion. But the firm said expenses tied to areas that do not swing with increased business volume dropped 5% from a year earlier.

However, Long said Merrill is “beginning to see their costs begin to accelerate faster than their revenues.” He said cost-control once again would be a factor for Merrill and other firms.

For the first nine months of the year, Merrill Lynch earned $525 million, or $4.57 a share, compared to $161.5 million, or $1.36 a share, a year earlier. Nine-month revenue rose 22% to $5.38 billion.

Paine Webber

The firm earned $38.4 million, or $1.21 per share, compared to $9.6 million, or 15 cents per share, a year earlier. Revenue totaled $529 million, up 22% from a year earlier.

Paine Webber attributed the improved results to increases in retail and institutional brokerage activities; higher demand for government, corporate and mortgage-backed securities, and a growth in fee and transaction revenue from individual investors.

The firm said retail client assets under control rose to $87.5 billion at the end of September from $69 billion a year earlier.

For the first nine months of the year, Paine Webber earned $103.7 million, or $3.29 per share, compared to $35 million, or 70 cents a share, a year earlier. Nine-month revenue was $1.52 billion, up 15%.