Merrill Earnings Rise but Miss Expectations

Merrill Lynch & Co. said Tuesday that its quarterly earnings rose 10%, helped by growth in asset management fees and mutual fund commissions. But the results missed expectations amid weak performance from trading activities, as many investors pulled away from markets in spring.

Merrill reported second-quarter net income of $1.08 billion, or $1.06 a share, compared with $977 million, or $1 a share, a year earlier.

Revenue edged up to $5.30 billion from $5.27 billion.

Analysts had been expecting earnings of $1.09 a share, according to Reuters Estimates.

The stock slumped $1.67 to $49.80.

Though the steady fee-based income from wealth management helped to stabilize Merrill’s results, and investment banking revenue was up, the more volatile business of trading showed its darker side this quarter.

Revenue from principal transactions -- which include trades made for the firm’s own account -- plunged 44% from a year earlier to $630 million.