Chase Earnings May Miss Forecasts, Analysts Say

Chase Manhattan Corp. probably will post fourth-quarter earnings below forecasts as falling stock prices bite into the No. 2 U.S. bank’s investments in start-up companies, analysts said. Chase’s investments, valued at $10.5 billion at the end of September, could decline by as much as $300 million in value in its fourth quarter, according to Ruchi Madan, an analyst at Salomon Smith Barney Inc. Combined with lower investment banking profit, Chase’s fourth-quarter earnings per share could be as low as 70 cents, Madan said. That compares with the average 85-cents-a-share forecast by analysts in a First Call/Thomson Financial survey. Chase’s investments have roiled the company’s earnings in the last four quarters, bolstering profit in last year’s fourth quarter and this year’s first, then cutting profit in the most recent two quarters. Chase shares fell $1.38 to close at $38 on the New York Stock Exchange. Of Chase’s 10 largest investments at the end of September, including fiber-optic component maker ONI Systems Corp. and drug company Praecis Pharmaceuticals Inc., eight are down so far in the quarter.