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Merrill 3Q earnings sink
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October 18, 2001: 10:58 a.m. ET
The brokerage's earnings are hurt by slow stock-market activity.
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NEW YORK (CNNmoney) - Merrill Lynch & Co. said Thursday that earnings tumbled 52 percent in the third quarter, hurt by slow stock market and investment banking activity, but the results topped lowered forecasts on Wall Street.
The nation's biggest brokerage reported earnings of $422 million, or 44 cents a share, down from $885 million, or 94 cents a share, a year earlier. Wall Street analysts expected New York-based Merrill to earn 41 cents a share, according to earnings tracker First Call.
Revenue fell to $5.15 billion from $6.14 billion a year ago.
Merrill (MER: up $1.12 to $45.35, Research, Estimates) stock rose sharply in morning trading after the results.
Brokerages, already suffering from a year-long downturn in the U.S. economy, were hit hard by the Sept. 11 terrorist attacks on the World Trade Center and Pentagon. Even before the attacks, on July 17, Merrill warned it would miss analysts' expectations at the time for quarterly earnings of 66 cents a share.
Not only did many brokerages lose offices -- Merrill has been unable to return to its offices in the World Financial Center, across the street from the site of the World Trade Center -- but the stock market shut down for four days, and fell sharply when trading resumed.
"While our results are reasonable given a business environment that was deteriorating even before the terrorist attacks of Sept. 11, we are not satisfied with them," CEO David H. Komansky said. "We are accelerating actions throughout all of our businesses to improve profit margins."
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Meanwhile, Merrill said Wednesday it was cutting back operations but did not elaborate after the Wall Street Journal reported it was set to cut as many as 10,000 jobs.
Separately, the firm is putting 400,000 square feet of space in the World Financial Center up for sublease, the newspaper reported Thursday. 
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