Brokerages Post Strong Profits in First Quarter

Merrill Lynch & Co., Paine Webber Group and Donaldson, Lufkin & Jenrette Inc. reported strong earnings for the quarter ended March 28, propelled by the booming stock market.

The first-quarter results for all three companies handily beat forecasts by industry analysts.

Merrill, the No. 1 securities firm, said its profit rose 11%. No. 7 PaineWebber said profit was up 20% and DLJ, at No. 8, said profit rose 55%.

All three companies credited their strong performances to healthy gains across the board in asset management fees, brokerage commissions and investment banking, which includes underwriting and corporate merger advice.

Shares in the three firms surged Monday on the strong results and renewed takeover speculation in the financial services industry after news of the $62.5-billion merger of BankAmerica Corp. and NationsBank Corp. and the combination of Banc One Corp. and First Chicago NBD Corp. in a $29.8-billion deal.

On the New York Stock Exchange, Merrill shares rose $4.06 to close at $99, DLJ jumped $7.38 to close at $101.25 and PaineWebber shares rose $2.06 to close at $45.94.

Merrill Lynch, PaineWebber and DLJ have all maintained their independence even as their competitors are caught up in a consolidation game. But all three companies have been the subject of takeover rumors.

Merrill, the leading U.S. underwriter of stocks and bonds during the quarter and No. 1 in advising on corporate mergers, earned $518 million, or $1.30 per diluted share, compared with $466 million, or $1.17, a year ago. Revenue after interest expenses rose 21% to $4.6 billion from $3.8 billion.