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J.P. Morgan strong in 2Q
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July 19, 1999: 10:33 a.m. ET
Mutual funds, investment banking cited for better-than-expected profit
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NEW YORK (CNNfn) - J. P. Morgan & Co. Inc. cruised past earnings targets in the second quarter amid a solid mutual fund business and strong growth in investment banking.
The New York-based company earned $504 million, or $2.52 per diluted share, in the quarter, compared to $481 million, or $2.36 per diluted share a year ago. But excluding a $79-million gain from the sale of its trust business last year, profit rose 25 percent.
Analysts had expected J.P. Morgan to report earnings of $2.24 per share, according to a poll by research firm First Call Corp.
Second-quarter 1999 revenue was $2.19 billion, compared to $2.15 billion a year earlier. But aside from the one-time gain last year, J. P. Morgan said revenues rose 8 percent.
J. P. Morgan's top official credited a strong cost-reduction effort and improvement in its underwriting and asset-management businesses, made up mainly of mutual funds. That came as the firm cut costs by more than $200 million in the first half of 1999.
"Growth and increased profitability in our client businesses, combined with more progress on productivity initiatives, produced a strong quarter," Chairman Douglas Warner said in a statement.
Revenues in its equities businesses soared 75 percent, to $427 million, and revenues from its investment banking activities rose 30 percent to $320 million.
J. P. Morgan also said however "corporate items" reduced revenues by $91 million, are contributing $37 million to revenue last year. A spokesman said that was largely due to costs linked to currency exchange
Shares of Dow industrials member J.P. Morgan (JPM) were up 1 at 138-3/8 in early trading on Monday.
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J.P. Morgan
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