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Travelers reports 25% gain
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April 20, 1998: 10:33 a.m. ET
Operating profit far outstrips consensus estimate as financial giant readies merger
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NEW YORK (CNNfn) - Travelers Group on Monday announced a 25 percent rise in first-quarter operating profit as its catch-all approach to financial services took hold, leading to improved cross-selling of products.
The New York-based company reported operating earnings of $1 billion, or 84 cents per diluted share, compared to $806 million, or 66 cents per in the year-ago period.
That far outpaced the consensus analyst forecast, as compiled by First Call, of 76 cents per diluted share in operating earnings.
Net profit in the first quarter rose 34 percent to $1.1 billion, or 95 cents per diluted share, compared to $815 million, or 71 cents per diluted share, in the first quarter 1997.
Revenues rose 19 percent to a record $10.4 billion in the quarter.
Travelers shares (TRV), which are included in the Dow Jones industrial average, rose 1/2 to 65-1/4 in early trading Monday.
"Operating earnings were up across-the-board, reaching all-time high levels in each of our insurance subsidiaries," said Sanford Weill, chairman and chief executive officer.
"Of utmost importance, we are very pleased with the continued success of our cross-selling efforts," he added.
Travelers has laid out a strategy of offering one-stop shopping for financial services for its customers. And the quintessential outgrowth of that approach was Travelers' announcement in early April it will merge with Citicorp in a $70 billion deal, Wall Street's largest ever.
The Salomon Smith Barney brokerage unit, which Travelers bought last September for $9 billion, reported a 22 percent gain in earnings to $502.8 million.
Travelers also reported a 15 percent gain in earnings from its Travelers Property and Casualty business to $253.1 million in the first quarter.
Travelers owns an 83 percent stake in that company, which trades separately under the symbol TAP. Its shares edged up 1/8 to 45 on Monday morning.
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Travelers Group
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