Merrill’s Quarterly Profit Soars 95%

Merrill Lynch & Co., the world’s biggest securities firm, on Tuesday said quarterly profit soared 95% to a record as revenue from bond trading and underwriting surged and an improving economy boosted fees from stock sales and merger advisory services.

The results also reflected a payoff from Chief Executive Stanley O’Neal’s three-year effort to cut costs, analysts said.

First-quarter net income increased to $1.3 billion, or $1.22 a share, from $643 million, or 67 cents, a year earlier, the New York-based company said.

Revenue was up 27% to $6.1 billion.

Profit exceeded the $1.07 a share Merrill was forecast to earn based on the average estimate of analysts surveyed by Thomson First Call. But the firm’s stock fell $1.12 to $58.61 on the New York Stock Exchange amid a broad market decline.

Merrill’s earnings suggest that the first quarter of 2004 was the most profitable in Wall Street’s history, according to Bloomberg News data.

Merrill’s global markets and investment banking unit led the profit rebound with a 49% increase in pretax income, to $1.1 billion, as revenue rose 32% to $3.2 billion.

Pretax profit in Merrill’s brokerage business more than doubled to a record $510 million as assets rose 18% from a year earlier, to $1.3 trillion.

Commission revenue for the whole firm, which includes individual and institutional brokerage commissions, increased 27% to $1.4 billion.

In Merrill’s asset management business, pretax profit rose to $111 million, almost triple the $39 million the unit earned in the first quarter of last year. Revenue rose 22% to $412 million.