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News
Merrill 2Q lower, warns
July 17, 2001: 8:34 a.m. ET

Brokerage beats lowered estimates, but sees slowdown continuing
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NEW YORK (CNNfn) - Merrill Lynch & Co. reported second-quarter earnings Tuesday that plunged from a year earlier, although the brokerage managed to beat lower estimates, and warned that third-quarter earnings will miss forecasts.

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Merrill reported fiscal second-quarter earnings of $541 million, or 56 cents a share, compared with $921 million, or $1.01 a share, a year earlier. Analysts polled by earnings tracker First Call expected Merrill to earn 54 cents a share.

"Our second-quarter performance underscores the difficult market conditions, particularly in our secondary equity business," said Merrill Lynch chief executive officer David H. Komansky.

Merrill also said it expects earnings to be lower in the third quarter than in the second. That would put the results below the First Call analysts' consensus of 66 cents a share.

"The revenue outlook remains uncertain through what is normally a seasonally slow summer period," said chief financial officer Thomas H. Patrick. "Without a significant improvement in market conditions from June levels, it is likely that our third-quarter earnings would be lower than the second quarter."

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An economic slowdown and downturn in the stock market in the past year have hurt brokerage houses, leading to lower profits and hundreds of job cuts.

Merrill, one of the nation's leading brokerage firms, said in June it expected earnings per share of 52 cents to 57 cents in the quarter.

Revenue in the quarter fell to $5.6 billion from $6.8 billion a year earlier, as all revenue sources, including brokerage commissions and investment banking, suffered.

Merrill Lynch (MER: Research, Estimates) shares closed Monday down $1.35 at $53.15. graphic

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