Several Big Banks Report Better-Than-Expected Profits

Chase Manhattan Corp. and Citicorp, the nation’s biggest banks, said Tuesday that second-quarter earnings exceeded estimates, led by gains in investment banking and currency trading.

San Francisco-based Wells Fargo & Co. and Banc One Corp. of Columbus, Ohio, also beat expectations, benefiting from acquisitions.

Mellon Bank Corp. topped estimates as well, gaining from its position as the largest bank provider of mutual funds.

Imperial Bancorp, the Los Angeles-based parent of Imperial Bank, said its second-quarter net income increased 51% to $16.6 million, or 40 cents per diluted share, from a year ago.

Chase said its operating earnings rose 11% to $1.08 billion, or $1.21 a diluted share, beating analysts’ consensus forecast of $1.19 a share, as operating revenue increased 14% to $5.1 billion.

Global banking operating revenue rose 15% as investment banking fees jumped 55%, even as trading revenue slid 18%. Noninterest revenue increased 27%, and net interest income increased 1.5%.

Credit card revenue rose 24%, driven in part by Chase’s acquisition of Bank of New York Co.’s credit card portfolio.

Citicorp, the nation’s second-largest bank, said its net income advanced 7.1% to $1.10 billion, or $2.30 a diluted share, topping Wall Street estimates by a penny.

The money center bank, whose $70-billion merger with Travelers Group is expected to close at the end of the month, said revenue jumped 19% to $6.8 billion. Fees from foreign exchange rose 50%. Noninterest revenue increased 31% and net interest revenue rose 4.6%.

Wells Fargo’s net income jumped 48% to $337 million, or $3.87 a diluted share, far exceeding analyst estimates of $3.78, as cost-cutting offset a drop in loan and deposit balances.

Wells Fargo, which plans to merge with Minneapolis-based Norwest Corp., said it continued to see growth in its core consumer businesses, with particular strength in lending to small and medium-sized businesses and the auto-leasing and capital markets.

Banc One’s earnings climbed 63% to $614.6 million, or 86 cents a share, excluding acquisition-related items, beating estimates by 2 cents. Net interest income fell 1.7%, while noninterest income rose 46%.

Banc One will be the nation’s fifth-largest bank after its merger with First Chicago NBD Corp., expected in the fourth quarter.

Mellon’s profit increased 16% to $215 million, or 81 cents a diluted share, beating forecasts by a penny, as it collected higher fees in its trust, investment and foreign exchange businesses due to new business and higher transaction volume.

At a Glance

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

AIRLINES

* America West Holdings Corp., parent of America West Airlines, said second-quarter profit climbed 91% to $43.9 million, or 90 cents a diluted share, beating expectations of 87 cents, on an 8.7% increase in revenue to $533.7 million.

* Northwest Airlines Corp.’s second-quarter profit dropped 33% to $91 million, or 95 cents a diluted share, as revenue slipped 3.2% to $2.48 billion. Analysts last month cut expectations to 85 cents after Northwest warned that a work slowdown by upset union members would cut profit.

TELECOMMUNICATIONS

* Sprint Corp.’s second-quarter profit fell a less-than-expected 16% to $214 million, or 49 cents a diluted share, as increased sales spurred by new marketing plans helped blunt wider losses at the long-distance company’s international and wireless businesses. The average forecast by analysts was 47 cents. Revenue rose 8.2% to $3.97 billion. Data services revenue soared 60%.

* BellSouth Corp.’s second-quarter profit rose a better-than-expected 17% to $818 million, or 82 cents a diluted share, exceeding forecasts of 80 cents. The local phone company’s revenue rose 15% to $5.66 billion.

OIL

* Exxon Corp., the nation’s largest oil company, said its second-quarter earnings fell 18% to $1.62 billion, or 65 cents a diluted share, as declining crude oil prices cut revenue 13% to $29.63 billion. Improved profit from refining and fuel sales helped Exxon slightly beat analysts’ estimates of 63 cents.

* Texaco Inc. said its second-quarter profit declined 24% to $335 million, or 60 cents a diluted share, as revenue fell 30% to $8.04 billion. The oil company’s earnings surpassed analyst forecasts of 50 cents because of strong refining and sales margins in Europe and Latin America.

OTHER INDUSTRIES

* AES Corp. said second-quarter profit soared 69% to $71 million, or 39 cents a diluted share, matching estimates, as the power plant developer completed purchases of electric generators and distribution lines. Revenue soared 116% to $565 million.

* Bear Stearns Cos.’ earnings jumped 47% in its fiscal fourth quarter to $239.3 million, or $1.67 a basic share, far exceeding estimates of $1.18. Revenue, net of interest expense, rose 27% to $1.22 billion at the nation’s sixth-largest brokerage. Investment banking revenue rose 67%. Commissions grew 19% and trading revenue was up 12%.

* Burlington Northern Santa Fe Corp.’s second-quarter profit grew 18% to $277 million, or $1.74 a diluted share, exceeding analyst estimates by 2 cents. Revenue increased 7.5% to $2.22 billion.

* Computer Associates International Inc.’s fiscal first-quarter profit rose 25% to $194.2 million, or 34 cents a diluted share, a penny higher than forecasts. The software maker’s sales rose 18% to $1.05 billion.

* Golden State Bancorp’s operating profit rose 56% in its fiscal fourth quarter to $43.5 million, or 57 cents a diluted share, including $7.3 million in charges related to the thrift’s breach-of-contract lawsuit against the U.S. government. The Glendale-based thrift was expected to earn 46 cents. Net interest income rose 20% and noninterest income gained 24%. Earlier this year, Golden State agreed to merge with San Francisco-based California Federal Bank, a closely held thrift, in what would create the second-largest U.S. savings and loan.

* ITT Industries Inc. said second-quarter profit fell 3.6% to $75.8 million, or 62 cents a diluted share, in line with forecasts, as growth in its pumps and electronics lines weren’t enough to offset the hit on its auto parts business resulting from the strikes at General Motors. Sales fell 4.3% to $2.15 billion. The GM strikes trimmed about 8 cents from the results, ITT said.

* Jones Apparel Group said its second-quarter profit rose 30% to $25 million, or 24 cents a share, beating estimates by 2 cents. Sales rose 16% to $308.6 million, with better-than-expected strength in its Jones New York and Lauren by Ralph Lauren fashions.

* Lockheed Martin Corp. said its second-quarter earnings fell 6.2% to $289 million, or $1.52 a diluted share, beating analyst estimates of $1.49, as revenue fell 5.5% to $6.52 billion. The results reflect asset sales since last year that represented more than $2 billion in annual revenue. On Thursday, Lockheed Martin scrapped its planned $10.7-billion purchase of Northrop Grumman Corp. rather than battle antitrust regulators.

* Oakwood Homes Corp., maker of manufactured homes, said its fiscal third-quarter earnings fell 78% to $4.96 million, or 10 cents a diluted share, after charges of $35 million to write down the value of its mortgage securities. Revenue increased 51% to $440.5 million. Wall Street was expecting 55 cents a share.

* Philip Morris Cos. said its second-quarter earnings rose 8.9% to $2 billion, or 82 cents a diluted share, from $1.84 billion, or 75 cents, matching analyst estimates, as revenue increased 4% to $18.98 billion. The world’s largest cigarette maker said its international tobacco unit’s profit rose 11% on a 4% increase in sales. Profit from U.S. tobacco operations rose 4.5% on higher prices, even as unit sales fell 5.8%. Profit rose 10% at its Kraft foods unit and 1% in its Miller beer operations, both mostly from cost-cutting.

* Pitney Bowes Inc.’s second-quarter profit rose 8.4% to $142 million, or 51 cents a diluted share, a penny higher than estimates, as sales at the office equipment maker grew 7.3% to $1.08 billion.

* Praxair Inc.’s profit edged up 1% to $108 million, or 66 cents a diluted share, better than the flat performance analysts expected. The industrial gas supplier’s revenue rose 4.8% to $1.23 billion.

* Texas Instruments Inc. said second-quarter earnings dropped 35% to $142 million, or 35 cents a diluted share, hurt by slumping prices for memory chips, a business it’s selling to rival Micron Technology. Analysts were expecting 37 cents. Sales fell 15% to $2.17 billion, but sales of digital signal processors--chips that go into everything from mobile phones to disk drives to cars--rose 25%.

* Textron Inc. said second-quarter earnings rose 13% to $164 million, or 98 cents a diluted share, led by strength in its Cessna aircraft and auto parts operations. The results beat estimates by 2 cents. Revenue rose 11% to $2.95 billion.

* T. Rowe Price Associates Inc.’s net income rose 26% to $44.9 million, or 34 cents a diluted share, a penny short of analyst expectations. The money management company’s revenue increased 23% to $222.3 million.

* VF Corp.’s second-quarter profit rose 10% to $86.8 million, or 70 cents a share, exceeding estimates of 67 cents. Sales at the apparel maker rose 7.6% to $1.35 billion, with strength from its Lee jeans and JanSport backpacks.

* Washington Mutual Inc.’s second-quarter earnings rose 31% on higher interest and fee income. The Seattle-based company said profit from operations rose to $276.4 million, or 73 cents a diluted share, from $211.4 million, or 56 cents, a year ago, adjusted for a 3-for-2 stock split. The earnings per share matched expectations.

Washington Mutual completed most of its acquisition of Great Western Financial Corp. in the quarter. Its purchase of H.F. Ahmanson & Co. is pending.

Separately, Ahmanson said second-quarter net income rose 19% to $137.3 million, or $1.12 a diluted share, from $115.7 million, or $1.01, a year ago.

* Waste Management Inc., which until July 16 was known as USA Waste Services Inc., said its second-quarter net income grew 45% to $130.4 million and its per-share earnings rose 34% to 55 cents a diluted share.