First-quarter profits at Chase Manhattan, Nationsbank and Continental Bank all exceeded expectations, as did the record performance of Merrill Lynch, the largest US securities firm.
Analysts said the banks were recovering more quickly than expected from their problems with property loans. In particular, big money-centre banks such as Chase are surprising investors with relatively good trading earnings, despite the drop in markets worldwide.
Chase made dollars 364m ( pounds 250m), compared with dollars 153m in the first quarter of 1993, and reported trading revenues of dollars 179m, slightly higher than the dollars 175m it brought in during the same period the year before. Its earnings per share of dollars 1.80 were more than 60 cents above Wall Street's mean estimate, pushing its shares up sharply.
Nationsbank, the North Carolina 'super-regional' bank that owns Panmure Gordon and Nations-CRT derivatives in London, made dollars 417m, a 48 per cent gain. Its shares closed up 3 8 at 521 2 . Continental Bank made dollars 63m, up slightly on the dollars 61m it made at the beginning of 1993.
Merrill's first-quarter profits - dollars 372m, up 21 per cent - also proved fairly resilient in the face of weaker trading revenues, which fell 11 per cent.
But the biggest surprise yesterday was the performance of McDonnell Douglas, the Los Angeles aerospace firm that has suffered both from Pentagon cuts and the weak international air travel market. McDonnell's first-quarter profit rose 20 per cent to dollars 134m, despite an 18 per cent drop in revenues, confounding the most optimistic predictions.
The benefits of stringent cost-cutting were finally paying off, analysts said, allowing the company to reduce debt and increase operating earnings. McDonnell shares leapt 27 8 to 1143 8 on a day when the Dow Jones Industrial Average declined more than 40 points.
The world's two largest computer companies, Microsoft and Intel, both reported results after the close of trading yesterday. Intel earned dollars 617m on sales of dollars 2.6bn, compared with dollars 548m on sales of dollars 2bn at the beginning of 1993.
Microsoft's operating profit rose to dollars 336m from dollars 243m.Reuse content