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Salomon 3Q net doubles
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October 21, 1997: 12:00 p.m. ET
Surging investment banking, securities sales boost earnings
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NEW YORK (CNNfn) - Salomon Inc. Tuesday reported net earnings of $206 million for the third quarter, almost double the $112 million the investment banking and brokerage firm earned in the same period of 1996.
The company earned $1.77 per share in the third quarter, well above Wall Street estimates of $1.47 and sharply higher than the 88 cents per share it earned in the third quarter last year.
Revenues rose to $2.525 billion from $1.985 billion in the third quarter of 1996.
"Salomon's performance this quarter was very solid," Salomon chairman Robert Denham said. "Taken as a whole, our diversified sales and trading businesses were strongly profitable, as has been the case in most quarters."
A 25 percent gain in global investment banking revenue, coupled with a surge in equity sales and rising fixed-income sales all contributed to Salomon's strong third-quarter performance, the company said.
The only area where revenues declined was commodities trading, which is conducted by Phibro Inc. Commodities trading revenues fell to $16 million in the third quarter of 1997 from $36 million in the same quarter of 1996.
In September, Salomon agreed to be acquired by Travelers Group in a merger valued at $9 billion. The transaction is expected to close by the end of the year.
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