NationsBank, First Chicago Beat Forecasts

NationsBank Corp., the huge banking concern that is acquiring BankAmerica Corp., posted a 53% increase in second-quarter earnings Monday, citing loan growth and improved investment banking and brokerage revenue.

Meanwhile, First Chicago NBD Corp., which agreed in April to be acquired by Banc One Corp., said its second-quarter profit rose 8% as income from bank fees offset declines in loan income.

The results from both companies beat Wall Street expectations for the period.

NationsBank, which will become the nation’s largest bank company when it completes its $62-billion merger with San Francisco-based BankAmerica later this year, had operating profit of $1.13 billion, or $1.18 per share, in the period ended June 30, up from $919 million, or 94 cents, a year ago. That beat the $1.14-a-share average anticipated by analysts surveyed by First Call Corp.

The latest earnings exclude a one-time pretax gain of $430 million from the sale of 67 banking offices arising from its merger with Florida-based Barnett Banks.

The Charlotte, N.C.-based bank’s biggest gains came from investment banking income, which more than doubled to $377 million, and brokerage income, which also more than doubled, to $113 billion.

Non-interest income rose 31% to $1.86 billion. Net interest income rose 3.7% to $2.56 billion as managed loans and leases rose 7.8% to $194 million.

The NationsBank-BankAmerica merger, announced in April, will create the nation’s first coast-to-coast bank with $570 billion in assets.

First Chicago, the nation’s eighth-largest bank holding company, said it earned $408 million, or $1.38 a diluted share, in the quarter, up from $378 million, or $1.20 a share, a year ago. The results beat expectations of $1.34 a share, according to a survey of analysts by First Call Corp.

The Chicago-based bank said net interest income fell 5.6% to $898 million while non-interest income rose 31% to $842 million as credit card fee revenue rose 13%. Income received from service charges and commissions rose 25% to $283 million.

NationsBank shares fell 19 cents to close at $87 on the New York Stock Exchange.

First Chicago shares rose 19 cents to close at $95.13, also on the NYSE.

At a Glance

Other earnings reported Monday, excluding one-time gains and charges unless noted:

Aerospace:

* AlliedSignal Inc. said its second-quarter net income rose 15% to $350 million, or 61 cents a diluted share, from a year ago on strong sales from its aerospace and turbocharger businesses. The aerospace and chemicals company’s revenue rose 8% to $3.9 billion. The results, which were released after the close of trading, beat analyst estimates by a penny.

Telecommunications:

* Hughes Electronics Corp.’s second-quarter operating earnings rose more than eightfold, powered by record DirecTV subscriber growth and its acquisition last year of 81% of PanAmSat Corp. Net income rose to $56.1 million, or 14 cents a diluted share, a penny better than the 13 cents analysts forecast. The El Segundo-based unit of General Motors Corp. said revenue rose 3.1% to $762.6 million. Profit rose 18% at its satellite-services unit and was up 12% at the unit that makes satellites. The unit that makes telecommunications equipment widened its losses.

* PanAmSat’s second-quarter earnings rose 14% to $27.8 million, or 19 cents a diluted share, from a year ago, as the satellite company recorded costs for the failure of its Galaxy 4 satellite in May, which disrupted service to tens of millions of paging and other customers. The results missed estimates of 21 cents. PanAmSat also said its board has approved a plan to provide expanded satellite services and backup capacity on a faster basis in the aftermath of the Galaxy 4 failure.

Financial Services:

* PaineWebber Group Inc. posted a better-than-expected 39% jump in second-quarter profit, led primarily by strong gains in revenue from investment banking and asset management. The securities company earned a record $129.5 million, or 82 cents a diluted share, in the quarter, far beyond the average forecast of 77 cents a share in a survey of six analysts by First Call Corp. Revenue jumped 19% to $1.62 billion. The results were enhanced by improved productivity and effective cost-control efforts, the company said. Investment banking revenue soared 60% to $176 million. Asset management fees rose 46% to $182 million. Commission revenue rose 15% to $402.1 million, while trading revenue slipped 4% to $244.1 million.

* Mortgage insurer MGIC Investment Corp. said second-quarter profit from operations rose 18% to $94.6 million, or 81 cents a diluted share, from a year ago, as low interest rates spurred home buying and reduced defaults. Analysts had expected 79 cents a share. Revenue rose 13% to $238.0 million.

Media:

* Gannett Co. said second-quarter profit rose 14% to $222.8 million, or 78 cents a diluted share, from a year ago, meeting analyst estimates. Gannett, which owns 84 daily papers and operates 21 television stations and cable TV systems, said strong demand for television and newspaper advertising offset higher newsprint costs. Revenue increased 10% to $1.3 billion.

* Media General Inc.’s second-quarter profit rose 55% to $21.5 million, or 80 cents a diluted share, from a year ago, largely on the strength of its publishing division. Revenue increased 9.5% to $251.2 million. Media General has interests in newspapers, television and newsprint.

Associated Press and Bloomberg News were used in compiling this report.