Merrill warns on 2Q profit
<font size=5>Market conditions cutting into revenue, profit from equity and debt trading</font>
June 26, 2001: 7:49 a.m. ET (=13:49 Uhr MESZ)
NEW YORK (CNNfn) - Merrill Lynch & Co. warned Tuesday that current market conditions will cut into second-quarter revenue and profit, particularly in equity and debt trading.
The brokerage firm said it <font color="#FF0000">expects earnings per share of 52 cents to 57 cents in the quarter, down from $1.01 a share a year ago and the consensus forecast of 82 cents a share </font>of analysts surveyed by earnings tracker First Call.
<font color="#FF0000">The warning sent shares of Merrill down $5.20, or 8 percent, to $61.25 in pre-market trading Tuesday, after it closed Monday off 53 cents for the day.</font>
Merrill warned during the first quarter conference call that if weakness at the end of that period persisted, it would be difficult to maintain profits and revenue. It said Tuesday that it has seen a decline from those levels.
"Market conditions have weakened further since March, with the past four weeks being the weakest of the quarter," the company said."As a result, second-quarter net revenues are expected to be approximately 15 percent lower than the $6.4 billion reported in the first-quarter 2001."
Analysts already had expected a 6 percent decline in revenue. But the new guidance, which puts second quarter revenue at about $5.4 billion, is well below the $6.0 billion forecast from First Call.
<font color="#FF0000">Merrill cited reduced trading volume, lower volatility and the impact of decimalization on trading spreads in the Nasdaq market</font>. It said its investment banking business has had increased market share in equity and equity-linked origination, while maintaining a leading position in announced mergers and acquisitions. But is said that segment also has had a downturn.
CEO David Komansky said that while third-quarter revenue also looks weak, expense cuts should allow the company to meet its full-year financial goals, although he would not give details. First Call's forecast is for 2001 earnings per share of $3.60, down from $4.12.
Quelle: http://www.cnnfn.com[/b]
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