DLJ, Travelers Post Strong Quarterly Gains
Donaldson, Lufkin & Jenrette surprised Wall Street on Monday with record third-quarter profit of $120.3 million, and another New York-based investment bank, J.P. Morgan & Co. Inc., reported a rise in quarterly earnings.
Meanwhile, Travelers Group Inc., led by profit at its Smith Barney Inc. brokerage and in its property and casualty insurance business, posted a 29% increase in third-quarter earnings.
Excluding gains from investment sales, Travelers Group profit rose to a record $740.8 million, or $1.12 a share, from $576.1 million, or 86 cents, a year earlier. The result beat analysts’ expectations.
Net income rose to $396 million, or $1.96 a share, from $276 million, or $1.32, in the same quarter last year. The results in the year-ago quarter included a 21-cents-a-share charge for investments in technology.
Travelers earnings were boosted by a 45% increase in profit at its Smith Barney brokerage, now in the process of merging with Salomon Brothers Inc. Earnings from consumer finance advanced 21%, as Traveler’s life insurance and retirement savings profits grew by 17%. The Primerica Financial Services unit saw a 25% earnings gain, while Travelers’ property and casualty subsidiary said profit rose 18%.
The earnings reports triggered surges in the companies’ stock. DLJ rose 50 cents to close at $76, J.P. Morgan’s stock rose $1.69 to close at $120.38 and Travelers rose 81 cents to $75.31. All trade on the New York Stock Exchange, and Morgan and Travelers are components of the Dow Jones industrial average of 30 companies.
DLJ’s $120.3 million in net income was equivalent to earnings per share of $1.80, which handily beat the consensus industry analyst forecast of $1.26 a share.
The current quarter’s earnings compared with net income of $56.1 million, or 86 cents a share, in last year’s third quarter. Revenue totaled $1.27 billion, as compared with $771 million in the year-ago period.
Morgan posted third-quarter net income of $396 million, or $1.96 per share, which was below the average analyst prediction of $1.99 per share.
Morgan’s profit represented a 43% rise from $276 million, or $1.32 a share, a year ago. Third-quarter 1996 earnings reflected a charge of $42 million, or 21 cents a share, related to technology costs.
At a Glance:
Hughes Electronics Corp.’s third-quarter profit fell 4.7%, as competition forced its Delco business to reduce prices for the electronics it supplies for parent General Motors’ autos. Los Angeles-based Hughes said profit from operations fell to $240.2 million, or 60 cents a share, from $252 million, or 63 cents, in the year-ago quarter. It was expected to earn 51 cents a share from operations.
Meanwhile, TRW Inc. said its third-quarter profit rose 13% because of a strong operating performance at its space and defense unit. Cleveland-based TRW, which also makes air bags and other auto parts, said earnings rose to $108.7 million, or 86 cents a share, from $96.1 million, or 74 cents, before a gain and a charge in the year-ago quarter. The per-share earnings beat the average estimate.
Lower prices pushed third-quarter earnings down 37% at Bowater Inc., the nation’s largest newsprint producer, while Boise Cascade Corp. suffered a nearly fourfold quarterly loss from weak paper operations, the companies reported Monday.
Bowater earned $16.8 million, or 40 cents a share, in the July-September quarter, down from $26.7 million, or 60 cents per share, in the same period last year. Boise Cascade lost $6.2 million, or 23 cents a share, compared with a loss of $1.7 million, or 24 cents a share. As its paper business continues to struggle, the company has failed to post a profit in five of the last six quarters.
Norwest Corp.’s third-quarter earnings rose 18%, as the Minneapolis-based bank increased its fee-based income. Norwest’s income was $341.6 million, or 89 cents a share, up from $289 million, or 76 cents, in the year-earlier period.
Host Marriott Corp. reported a fiscal third-quarter profit, compared with a year-earlier loss, helped by revenue growth at its Marriott and Ritz-Carlton luxury hotels, as well as acquisitions. Host Marriott reported net income of $6 million, or 3 cents a share, compared with a loss of $2 million, or 1 cent, a year ago.
Gannett Co. said its third-quarter earnings rose 37% to $152.5 million, or 54 cents a share, from $111.2 million, or 39 cents, before a gain from the sale of an asset in the year-earlier period.
El Segundo-based Aura Systems Inc. reported fiscal second-quarter net income of $486,385, or 1 cent per share, compared with $524,926, or 1 cent a year ago.
Dekalb Genetics Corp. reported a fiscal fourth-quarter loss of $2.7 million, or 7 cents a share, as compared with a loss of $1.2 million, or 3 cents, in the year-ago quarter.
